During the fourth quarter of 2022, 48 ERISA-related lawsuits were filed and/or updated. Each event represents the involved parties either reaching a settlement or filing an appeal, or a court decision was made. There were 179 and 133 ERISA-related stories written in 2022 and 2021, respectively.
December
- AllianceBernstein was sued for its alleged repeated failure to replace imprudent proprietary investments and the inclusion of funds that benefit the defendants financially, while other well-managed investment options with solid performance records were available. AllianceBernstein was also accused of using its $1.56 billion plan for seed money for newly launched AB funds.
- Milliman’s petition to dismiss ERISA allegations that adding target-risk funds to its $1.7 billion plan with a very brief record that had performed poorly was rejected.
- NCR Corp. was sued for paying “grossly excessive fees” on its $2.2 billion 401(k) plan and its failure to conduct a periodic RFP process since Fidelity was appointed as the record keeper in 2009.
- An ERISA lawsuit against Wood Group U.S. Holdings was allowed to proceed, and the judge ruled in favor of plaintiffs in two of five counts against Wood Group and one count against flexPath Strategies. The lawsuit centered on the imprudence in target-date series selection and conflict of interest with the $2.8 billion plan. ()
- Gannett Co. Inc.’s request to dismiss an ERISA lawsuit was denied and the plaintiffs claimed that Gannett “should have acted faster” in July 2016 to avoid having two non-diversified investments in the $1.9 billion 401(k) plan lineup.
- Taylor Corp. was sued for allegedly charging high record-keeping and investment fees for its $947 million plan.
- Humana Inc.’s second request to dismiss an ERISA lawsuit alleging high record-keeping and investment management fees at its $7.35 billion 401(k) plan was denied as the judge ruled defendants did not argue that there is new evidence, clear error, or manifest injustice.
- Booz Allen Hamilton Inc.’s ERISA case for allegedly offering a poor-performing BlackRock target-series in its $7.85 billion plan while other comparable options were available was dismissed.
- Old Dominion Freight Line Inc. was sued for ERISA violations of offering high-priced investments when cheaper and identical options were available for its $2 billion 401(k) plan.
- Sprint Communications LLC was sued for using improper interest rates and out-of-date 1976 mortality tables to calculate retirement benefits and its failure to incorporate improvements in life expectancy.
- DST Systems Inc. and its participants reached a preliminary settlement agreement. DST’s 401(k) plan was sued for an exceptionally imprudent investment strategy for its investment in Sequoia Fund, which invested 35% of its assets in Valeant Pharmaceuticals International.
- Takeda Pharmaceuticals U.S.A. Inc. reached a $22 million settlement with its participants over allegations it was maintaining “unproven” collective investment trust target-date Northern Trust Focus Funds in its investment lineup.
- LinkedIn Corp. settled an ERISA lawsuit for allegedly retaining an imprudent actively managed target-date series from Fidelity Investment, which wasn’t a defendant.
- Hy-Vee Inc.’s petition to reject all ERISA allegations was dismissed. However, the judge did dismiss claims regarding alleged excessive investment management fees because the plaintiffs failed to provide “meaningful benchmarks” and “necessary context” about total costs.
- Juniper Networks Inc. will pay $3 million to settle an ERISA lawsuit for allegedly charging “unreasonably” high record-keeping and managed account fees for its $1.9 billion 401(k) plan.
- An ERISA lawsuit against Ricoh USA Inc.’s $2.3 billion 401(k) plan for its failure to control plan and investment fees was dismissed; the court determined that the complaint can be amended if “meaningful benchmarks” are provided.
- An ERISA lawsuit against Yale University’s $7.1 billion 403(b) plan for its alleged failure to monitor excessive fees paid to record-keeper TIAA-CREF will proceed to trial. A trial is necessary to determine if Yale failed to obtain competitive bids and used asset-based pricing.
- Allegiant Travel Co. was sued for paying excessive record-keeping, and other administrative fees, and employing flawed and ineffective processes with its $371 million plan.
- An ERISA lawsuit against Northwell Health Inc. for charging high fees and retaining a poor investment lineup was dismissed.
- Universal Health Services agreed to pay a $12.5 million settlement in a lawsuit alleging excess fees and maintaining an imprudent investment lineup. ()
- The judge dismissed the ERISA allegations against Home Depot Inc. for paying high fees and maintaining an imprudent investment lineup with its $12.8 billion plan.
