Voya Reaches Confidential Settlement in Excessive Recordkeeping Fee Suit
A judge previously dismissed claims related to excessive recordkeeping fees but let stand a claim related to providing ‘false and misleading’ participant fee disclosures.
A lawsuit against Voya Financial and Voya Retirement Insurance and Annuity Co. has been dismissed because the parties have reached a confidential settlement resolving all claims.
The lawsuit had alleged that asset-based fees led to a 19-participant retirement plan paying $1,819 per participant for recordkeeping services.
The Cornerstone Pediatric Profit Sharing Plan retained Voya to provide administrative and recordkeeping services to the plan pursuant to a group annuity contract. The plan sponsor also used Voya to prepare and deliver Rule 404a-5 participant fee disclosures.
Last year, Judge Colm F. Connolly of the U.S. District Court for the District of Delaware dismissed all but one claim in the lawsuit. He found that Voya was not a fiduciary with respect to the fees charged because it does not control the named fiduciary’s negotiation and approval of those terms. He noted that the fees Voya charges the plan and its participants were set in the contract, and at the time the fee schedules were proposed, Voya had no relationship with the plan or its participants and could not have been a fiduciary.
The only charge that survived regarded Voya providing “false and misleading” participant fee disclosures.
The lawsuit was dismissed with prejudice, meaning the plaintiff cannot file another suit on the same grounds.
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