Empower Retirement is the latest retirement plan provider accused of charging excessive fees to retirement plans and participants.
A recently filed lawsuit says Empower Retirement has entered into revenue-sharing agreements and similar arrangements with various mutual funds, and other investment advisers, instruments or vehicles by which it receives revenue-sharing payments for its own benefit in violation of the Employee Retirement Income Security Act (ERISA).
According to the compliant, the revenue-sharing payments range from twenty-five (25) basis points of the total assets of the plans to substantially greater revenue-sharing payments. The lawsuit filed by TPS Parking Management, LLC 401(k) Plan seeks to recover damages not only for the TPS plan but for “all other similarly situated retirement plans and entities” that are employee benefit plans under ERISA, subject to Internal Revenue Code Sections 401(a) and 401(k), and subject to the revenue sharing payments and other compensation that Empower Retirement receives.
The lawsuit contends that the revenue-sharing payments received by Empower Retirement constitute excessive fees and otherwise violate ERISA because their receipt results in prohibited transactions under ERISA.
Great-West, the named defendant in the suit, issued a statement to PLANSPONSOR saying, “We won’t comment on pending litigation; however, we will say we believe this suit and the claims it makes are without merit, and we will defend the matter vigorously.”
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