Supreme Court Seeks Input from Solicitor General in 401(k) Fees Case 

The U.S. Supreme Court is seeking the U.S. solicitor general’s input on a case alleging Parker-Hannifin Corp.’s 401(k) plan kept underperforming target-date funds that charged high fees, the justices announced on June 30. 

The complaint, originally filed in 2021 by five current and former Parker-Hannifin participants, on behalf of roughly 32,000 participants in Parker Retirement Savings Plan, alleged that the company breached its fiduciary duties under the Employee Retirement Income Security Act by mismanaging its retirement plan by retaining high cost, underperforming target-date funds. 

A federal judge in the U.S. District Court in Cleveland dismissed the plaintiffs’ claims in a December 2023 decision, that was later overturned by the 6th U.S. Circuit Court of Appeals, Cincinnati.  

The Circuit Court’s majority opinion stated that the company breached its fiduciary duties by “failing to monitor its agents in their fiduciary duties” by not replacing the underperforming TDF, and for not securing lower-cost investments, resulting in excessive fees that reduced employee retirement savings. 

Parker-Hannifin petitioned the Supreme Court to review the case in March 2025, presenting the question of “whether pleading an imprudent-investment claim under ERISA, based on how the investment’s returns compared to some performance benchmark, requires allegations showing that the benchmark is a sound basis for comparison for that investment.” 

The Parker Retirement Savings Plan, had $7.2 billion in assets and comprised 36,654 participants as of Dec. 31, 2023, according to the latest Form 5500.