A federal court judge ultimately found that a participant in George Washington University’s two retirement plans had previously waived her right to sue for fiduciary breaches under the Employee Retirement Income Security Act (ERISA) in a previous agreement.
Tag: retirement plan investments
A federal court found plan fiduciaries acted with loyalty and prudence, and that plaintiffs failed to show the failure to have an investment policy in place, standing alone, proves imprudence.
According to Northern Trust, Corporate Employee Retirement Income Security Act (ERISA) pension plans had the best first quarter on a relative basis, while the Wilshire Trust Universe Comparison Service shows Taft Hartley defined benefit (DB) plans, which had the largest allocation to U.S. equities, posted the highest Q1 gain.
Though the contention in the lawsuit was over Eaton Vance’s use of mostly proprietary funds in its 401(k) plan, the settlement agreement only calls for a $3.45 million payment and no change to the fund menu.
However, in a dissenting opinion, Senior Judge Jane Richards Roth says cases such as this one should be carefully scrutinized in order not to permit implausible allegations to result in a large settlement, under which a substantial portion of the funds are diverted to attorneys’ fees.
FINRA accuses AXA of providing documents to plan sponsors and participants that misrepresented the credit quality of certain bond funds offered in group annuity contracts to 401(k) plans.
The latest report from Russell Investments shows the largest defined benefit (DB) plan sponsors have shifted more to fixed income investments and increased contributions as they continue to de-risk.
In addition to a $23.6 million payment, the settlement agreement includes additional terms relating to a review of investment options in the plan and conducting a request for proposals (RFP) for a new recordkeeper.
The court found the Sequoia Fund’s investment in Valeant Pharmaceuticals was consistent with the retirement plan documents, and plaintiffs concentrated unnecessarily on whether the fund purported to be a value fund or growth fund.
The case is notable for arguing that an investment that had only a 4 basis point annual fee could have been replaced by one charging only 2 basis points.
A federal judge found that the plaintiffs provided more than enough evidence to support excessive fee claims, noting that, “Plaintiffs cite deposition testimony of Anthem employees and Pension Committee members who indicate they do not understand the difference between different kinds of share classes or did not ask Vanguard whether lower-cost fee arrangements were available for the plan.”
In a case that alleges, among other things, that defendants breached their ERISA duties by offering a money market fund rather than a stable value fund as a capital preservation option, plaintiffs say the 9th Circuit imposed strict pleading standards that conflict with its own decisions as well as those of other circuits.
A university spokesperson told Yale News that the changes to the retirement plan were not in response to ongoing litigation.
The case against the $500 million 401(k) plan was also settled for a “small” amount—$500,000.
After a complex set of motions and rulings, the parties have now opted to settle the ERISA self-dealing lawsuit rather than proceed to the full trial.
The lawsuit alleged that the company selected high-cost proprietary investment products offered and managed by Jackson National and its affiliates on the plan’s menu of investment options, allowing it to maximize profits.
The 1st U.S. Circuit Court of Appeals found “several errors of law in the district court’s rulings.”