Kentucky mining industry plan fiduciaries face allegations that they failed to remit participant salary deferrals.
The entire retirement account balance of a Colgate-Palmolive retirement plan participant who lives in South Africa was distributed to a bank account in Las Vegas.
According to the plaintiffs, the plan’s fiduciaries did not try to reduce the plan’s expenses, resulting in the assessment of excessive fees.
The detailed ruling comes after Schwab defendants moved to dismiss in part the plaintiff’s second amended complaint.
Plaintiffs allege plan fiduciaries should have known the company’s stock price was artificially inflated—and that fiduciaries breached their duties of prudence and loyalty by continuing to offer J&J stock in the retirement plan.
The decision goes into significant detail, but in essence plaintiffs’ approach failed because they relied on bare cost comparisons and statements of industry averages, failing to show any actual fiduciary breach occurred.
Attorneys with Mayer Brown say there has been little consensus or direction from the federal courts (at least so far) as to what exactly constitutes prudent administration of tax-qualified benefit plans; this will remain a challenge in 2019 and beyond.
The court officially ended the case by approving a dismissal motion jointly filed by the parties.
Similar to a lawsuit the firm settled a few years ago, a newly filed district court complaint says Transamerica “saddled its defined contribution plan participants with substandard investment portfolios that were managed by an affiliate.”
ERISA lawsuits very often lead to settlements or dismissals, but 2018 brought a series of important and potentially precedent-setting decisions in both district and appellate courts.
The judge approved just one part of General Electric’s motion to dismiss an ERISA lawsuit alleging self-dealing, allowing seven counts to proceed to discovery.
The appellate panel concluded that disputes of material fact exist as to the timing of the plaintiff’s actual knowledge of the alleged fiduciary breach, precluding summary judgment for untimely filing; after a detailed discussion of ERISA requirements, the case is remanded for further district court proceedings.
The case has been vigorously litigated for over three years; now, just weeks ahead of a scheduled trial, negotiations between the parties have delivered a resolution, pending a judge’s approval.
According to the court, the consolidated complaint “pleads no facts sufficient to raise a plausible inference that defendants took any of the actions alleged for the purpose of benefiting themselves or a third-party entity.”
A federal district court judge entered a judgment requiring Michael Lewis, former president of Acme Orthotics and Prosthetic Laboratories Inc., to restore $128,535.75 in losses owed to the company’s Profit Sharing 401(k) Plan and Trust.