March 5, 2007 (PLANSPONSOR.com) - The St. Louis law
firm that made national news by filing a batch of lawsuits
over "excessive" retirement plan fees has now turned its
legal sights to the CIGNA Corporation and its 401(k)
Attorneys Daniel Conlisk and Heather Lea of the
Schlichter, Bogard & Denton firm filed a 58-page
fiduciary breach suit against CIGNA, plan administrator
John Arko and the Corporation Benefit Plan Committee. The
suit was filed on behalf of plaintiffs Kim Nolte, Sherry
Lewis and Theresa Mitchell, employed by CIGNA HealthCare
of Illinois in Bourbonnais, Illinois, under the Employee
Retirement Income Security Act (ERISA).
The suit includes a request to be certified as a
class action on behalf of other CIGNA 401(k)
participants. The suit said attorneys aren't sure of the
number of people currently in the class but noted that
there were 44,322 participants at the end of 2005 with
The litany of legal sins CIGNA and its officials
were accused of committing, according to the lawsuit,
charging unreasonable fees and expenses to the
plan that were not incurred solely for participants'
entering into agreements with third parties
that forced the plan to pay unreasonable fees and
failing to monitor the fees and expenses paid
by the plan;
failing to understand the various methods by
which vendors in the 401(k), financial and retirement
industry collect payments and other revenues from
failing properly to disclose to participants
the plan's fees and expenses.
The plaintiffs claimed the defendants have not
informed plan participants of the actual dollar
amount of investment management fees deducted from their
401(k) accounts. Instead, investment management fees are
subtracted from plan participants' accounts before the
returns of participants' investment option/funds are
reported, so that the fees do not appear on participants'
statements, the suit charged.
Nonetheless, the plan has incurred "substantial"
recordkeeping, administrative and other costs and
defendants have charged such costs against plan
participants accounts though hidden revenue sharing
payments, the suit claimed.
The suit charges that the defendants are liable to the
plan and the plaintiffs for losses suffered as a result of
the alleged fiduciary breaches and should be charged for
any transactions for which they cannot account or which
were not proper uses of plan assets.