In an exclusive interview with PLANADVISER, PGIM Head of Institutional Defined Contribution Josh Cohen offers some guidance to advisers speaking with plan sponsors about litigation, fiduciary risk and progressive plan design.
Plaintiffs argue it was inappropriate to allow three recordkeepers to supply the plans with a separate menu of investment choices, including mutual fund share classes that charged higher fees than other alternatives that offered the same investment strategies or less expensive share classes of the exact same investment fund—or both.
The number of Employee Retirement Income Security Act lawsuits winning class certification in 2017 far outstripped the number of suits within which class action status was denied; attorneys with Seyfarth Shaw offer detailed analysis of all the ongoing cases.
The underlying lawsuit will proceed and will test whether the firm acted imprudently or disloyally in discharging its discretionary fiduciary authority when including its own affiliated investment products in its internal retirement plan.
The lawsuit alleged that defendants’ conduct cost plaintiffs and the proposed class millions of dollars needlessly expended on excessive fees and costs; however, in a short but informative opinion, a judge has ruled the proposed class of plaintiffs lacks standing.
The richly detailed text of the complaint shows multiple individuals are accused of defrauding Great-West and depositing ill-gotten assets in a variety of U.S. banks, resulting in fraud and money laundering charges.
The plaintiffs challenge three features of the 2012 amendment: the change to the crediting rate; the introduction of potential for risk and volatility into the plan; and variations in annual distribution.
The original complaint accuses the plan and its administrative and investment committees of self-dealing, causing excessive fees to be charged by service providers and mismanaging the plan’s emerging markets equity fund.