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L3Harris Retirement Plan Breach of Fiduciary Duties ERISA Class Action

The fiduciary duties of loyalty and prudence have been called “the highest known to the law.” This class action brings suit for breach of these duties against L3Harris Technologies, Inc., its Board of Directors, the Investment Committee of L3Harris Technologies, and the committee’s members. The complaint alleges that these defendants did not monitor the costs and performance of the investment options selected for the company’s L3Harris Retirement Savings Plan.

The class for this action is all persons and their immediate family members who were participants in or beneficiaries of the plan, at any time between November 23, 2015 and the date of judgment in this case.

The complaint quotes the Department of Labor as saying that employers should be held to a “high standard of care and diligence” and should both “establish a prudent process for selecting investment options and service providers” and “monitor investment options and service providers once selected to see that they continue to be appropriate choices.”

In fact, the complaint alleges, “Additional fees of only 0.18% or 0.4% can have a large effect on a participant’s investment results over time” because the participant loses both the fees and the interest that money would have earned over time.

During the period of time in question in this case, the plan always had at least $4.5 billion in assets undermanagement, and at the end of 2019, the figure was more than $13.5 billion. The complaint alleges that this makes it a jumbo plan, one of the largest in the US, and that it therefore had substantial bargaining power in the marketplace to get lower fees for its participants.

Another way of controlling costs is through the choice of share classes made available as investment options in the plan. For example, the complaint calls attention to the choice of share classes in the investment options for the plan. It quotes an earlier court case as finding that, because “the institutional share classes are otherwise identical to the Investor share classes, but with lower fees, a prudent fiduciary would know immediately that a switch [from Investor share classes to institutional share classes] is necessary.”

Also, different investments have differing performance histories that show which ones earned more for their investors and which ones performed poorly.

The complaint alleges that the L3Harris defendants failed in their fiduciary duties to the retirement plan in three ways:

  • They did not control the plan’s administrative and recordkeeping costs.
  • They did not adequately review the investments offered to make sure that each option was prudent, in terms of cost.
  • They kept certain funds as investment options in the plan, even though similar or identical investment options were available with lower costs or better historical performance.
Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

L3Harris Retirement Plan Breach of Fiduciary Duties ERISA Complaint

March 18, 2022

The fiduciary duties of loyalty and prudence have been called “the highest known to the law.” This class action brings suit for breach of these duties against L3Harris Technologies, Inc., its Board of Directors, the Investment Committee of L3Harris Technologies, and the committee’s members. The complaint alleges that these defendants did not monitor the costs and performance of the investment options selected for the company’s L3Harris Retirement Savings Plan.

L3Harris Retirement Plan Breach of Fiduciary Duties ERISA Complaint

Case Event History

L3Harris Retirement Plan Breach of Fiduciary Duties ERISA Complaint

March 18, 2022

The fiduciary duties of loyalty and prudence have been called “the highest known to the law.” This class action brings suit for breach of these duties against L3Harris Technologies, Inc., its Board of Directors, the Investment Committee of L3Harris Technologies, and the committee’s members. The complaint alleges that these defendants did not monitor the costs and performance of the investment options selected for the company’s L3Harris Retirement Savings Plan.

L3Harris Retirement Plan Breach of Fiduciary Duties ERISA Complaint
Tags: Breach of Fiduciary Duty, ERISA Violations, Retirement Plans