Court Tosses 401(k) Participants' Request for Investment Losses Relief

February 28, 2007 (PLANSPONSOR.com) - The U.S. District Court for the Northern District of Illinois dismissed a request for repayment of investment losses by two 401(k) plan participants, who alleged their company allowed investment managers and other service providers to charge unreasonable plan fees and failed to disclose those fees to the participants.

In the two-page opinion, U.S. District Judge John Darrah said that the 401(k) participants in the Exelon Corp plan failed to make a "link between the administrative fees they were charged and their market-based losses."

The plan participants had alleged that Exelon Corp breached its fiduciary duty under the Employee Retirement Income Security Act (ERISA).

The plaintiffs were seeking compensation for direct losses, or those incurred as the direct result of fiduciary breach, and investment losses,   or those attributed to market fluctuations.

The case is Brian Loomis v. Exelon Corp., N.D. Ill., No. 06 C 4900, 2/21/07. 

The suit was one of a handful filed in September 2006 by St. Louis attorney Jerome Schlichter alleging that 401(k) plans fees were excessive (See  Lawyer: Excessive Fee Suits Not an Organized Anti-Plan Campaign ).

Adrien Martin
editors@plansponsor.com