Speaking to a room of plan sponsors and specialist consultants in Boston, two ERISA litigation experts offered a detailed review of recent action in big-ticket lawsuits impacting employer sponsored retirement plans.
Some 83,000 lawsuits have been filed under the Employee Retirement Income Security Act in federal district court since 2009, according to Lex Machina, a LexisNexis company; fewer than 2% of cases proceed to trial.
Another district court ruling in the matter of Alas vs. AT&T sides in part with the plaintiffs and in part with the defendants, making yet another amended complaint likely even before any allegations can advance to trial.
The settlement amount is $4.5 million, and the Jackson National defendants admit no wrongdoing.
Putnam Investments has asked for a stay in a case accusing it of self-dealing in its 401(k) plan so it can petition the U.S. Supreme Court regarding whether a plaintiff or an accused fiduciary has the burden of proving whether or not an ERISA fiduciary breach caused a loss.
If convicted on all counts, they face up to 81 years in federal prison.
The interim decision is a mixed bag that falls more in favor of the plaintiffs, but it by no means concludes the litigation—not least because plaintiffs have already filed a second amended complaint.
Finding "errors of law" in a district court's decision, the 1st Circuit remanded the duty of prudence claims for review.
The complaint specifically calls out the 11 T. Rowe Price target-date funds (TDFs) offered by the plans, saying they are all adviser or retail class funds—as opposed to investor or institutional class funds.
In addition to self-dealing allegations, the complaint calls out Fidelity for not negotiating revenue sharing refunds for its 401(k) plan participants and not considering stable value options for its plan investment lineup, among other things.
Reliance Trust will pay $4,545,454 back to the plan within 30 days.
SS&C Technologies acquired DST Systems, so the new lawsuit is similar to a previous one against DST for failing to diversify assets in its profit sharing plan.
Once a federal judge dismissed the breach of fiduciary duty claims, she found most defendants were not fiduciaries with respect to the remaining claim.
At the heart of the complaint were guaranteed investment contracts, a type of group annuity contract sold to retirement plans, issued by Principal to ERISA-covered retirement plan participants.
The lawsuit seems keenly aware of the poor record other such complaints have had in federal court since the crucial Supreme Court ruling in Fifth-Third vs. Dudenhoeffer—focusing its arguments more on the imprudent concentration of employer stock as opposed to inflated valuations.
Its former executive pastor and his wife presented evidence showing that supplemental retirement benefits were improperly taken in November 2011 and placed in the church's building campaign.
Wilmington Trust subsidiaries were found not to be fiduciaries, but other claims against the M&T Bank retirement plan committee were moved forward.
The case ascended on appeal from the U.S. District Court for the Western District of Texas, where it also flatly failed to meet the high hurdles for proving standing established in Fifth-Third Bank vs. Dudenhoeffer.
The 6th Circuit said a district court rejected case law when it reasoned that the cases relied on by the Pension Benefit Guaranty Corporation (PBGC) arose under the Multiemployer Pension Plan Amendment Act (MPPAA) and did not address single-employer plans.
The U.S. Supreme Court denied the archdiocese’s application for a temporary reprieve from a court order to pay $4.7 million to both retired and active teachers; however, filing for bankruptcy temporarily freezes all litigation.