Wal-Mart Captures Resounding Excessive Fee Suit Victory

November 21, 2008 (PLANSPONSOR.com) - A federal judge in Missouri handed retail giant Wal-Mart Stores a resounding legal victory by swatting away a participant's excessive fee lawsuit for falling short of the plaintiff's responsibility to show the employer violated its fiduciary responsibilities.

On each charge leveled in the five-count suit, U.S. District Judge   Gary A. Fenner of the U.S. District Court for the Western District of Missouri ruled that plaintiff Jeremy Braden, a participant in Wal-Mart's profit-sharing/401(k) plan, had not proven the employer and the plan fiduciaries had not properly fulfilled their responsibilities.

In his March 2008 suit (See  Wal-Mart Hit with Excessive 401(k) Fee Suit ), Braden charged that the plan had paid $62 million to $92 million in fees since January 2002 in connection with the 10 mutual funds offered as plan investment options. By using participant assets to pay those allegedly excessive fees, Braden charged, the employer and the plan fiduciaries violated the Employee Retirement Income Security Act (ERISA).

Fenner ruled that Braden's suit contained little more than "conclusory allegations, without any factual support" that Wal-Mart and the fiduciaries had not properly considered a range of options or used a legally defensible process when deciding on the plan's structure or its investment offerings.

"Wal-Mart and the (Retirement Plans Committee)   could have chosen funds with higher fees for any number of reasons, including potential for higher return, lower financial risk, more services offered, or greater management flexibility," Fenner ruled. "Plaintiff's dissatisfaction with fees or earnings does nothing to establish a colorable claim that Wal-Mart and the (committee) did not properly investigate available options before making a (plan) decision."