Litigation Concerning 401(k) Fees and Expenses

We have extensive experience with the recent wave of class action lawsuits against plan sponsors, record-keepers and other defendants dealing with the fees paid to 401(k) plan service providers. These lawsuits have generally alleged breaches of fiduciary duty and have challenged the adequacy of disclosures about “revenue sharing” arrangements between service providers and mutual fund companies as well as the amount of the fees paid in connection with plan investments. Sidley is representing both plan sponsors and service providers in 401(k) fee cases.

Representative matters include:

• Loomis v. Exelon Corp., 658 F.3d 667 (7th Cir. 2011). We won affirmance of the dismissal of an ERISA class action brought by participants in the Exelon 401(k) plan alleging that the company, some of its officers, and some of its board members breached their fiduciary duties by permitting the plan to pay excessive fees to service providers.
• Walsh v. Principal Life Ins. Co., 266 F.R.D. 232 (S.D. Iowa 2010). We won the denial of class certification in a “rollover” case alleging that our client breached its fiduciary duty by marketing a more expensive share class to plan participants who leave the employment of the plan sponsor and roll over their funds.
• Ruppert v. Principal Life Ins. Co., 252 F.R.D. 488 (S.D. Iowa 2008). We won the first and so far only denial of class certification of a case alleging that a service provider violated ERISA by accepting “revenue sharing” payments.
• Pender, et al. v. Bank of America Corp., et al., W.D.N.C. 05-CV-00238. The plaintiffs filed a class action lawsuit against Bank of America Corporation, its 401(k) plan, the company’s directors and members of its management, and other defendants in the Southern District of Illinois. Following transfer of the case, plaintiffs voluntarily dismissed their claims relating to the mutual fund fees and expenses and dismissed the directors from the lawsuit.