LinkedIn 401(k) Retirement Plan Fiduciary Duties Class Action

The Employee Retirement Income Security Act of 1974 (ERISA) governs the handling of company 401(k) plans—in this case, the LinkedIn Corporation 401(k) Profit Sharing Plan and Trust. This class action claims that those handling the LinkedIn plan have breached their fiduciary duties in regard to plan expenses and investment options. It brings suit against not only LinkedIn Corporation but also the Board of Directors and 401(k) Committee and their members during the class period.

The class for this action is all persons (except the defendants in this case) and their immediate family members who were participants or beneficiaries of the Plan at any time between August 14, 2014 through the date of judgement in this case.

The complaint notes that “ERISA imposes strict fiduciary duties of loyalty and prudence upon employers and other plan fiduciaries. Fiduciaries must act ‘solely in the interest of the participants and beneficiaries” … with the ‘care, skill, prudence, and diligence’ that would be expected in managing a plan of similar scope.”

These duties include giving proper attention to investment options. The complaint quotes the Uniform Prudent Investor Act (UPIA) as saying, “Wasting beneficiaries’ money is imprudent. In devising and implementing strategies for the investment and management of trust assets, trustees are obliged to minimize costs.”

This means that those managing plans must be cost-conscious, not only in assessing investments initially but also in monitoring and reviewing investments afterwards.

Participants may pay fees and costs directly to investment providers, “usually in the form of an expense ratio or percentage of assets under management with a particular investment[,]” the complaint says.

The LinkedIn plan, the complaint says, qualifies as a large plan: “As a large plan, the Plan had substantial bargaining power regarding the fees and expenses that were charged against participant’s investments. Defendants, however, did not try to reduce the Plan’s expenses or exercise appropriate judgement to scrutinize each investment option that was offered in the Plan to ensure it was prudent.”

The complaint makes allegation that those managing the plan did not fulfill their fiduciary duties to help participants save money in several ways:

  • It alleges they did not choose lower-cost alternative funds.
  • It alleges they did not choose lower-cost alternative trusts.
  • It alleges they did not use lower-fee share classes.
  • It alleges they did not use lower-cost passively managed funds.

The complaint shows charts comparing costs of various options in each of these categories to support these contentions.

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

LinkedIn 401(k) Retirement Plan Fiduciary Duties Complaint

August 14, 2020

The Employee Retirement Income Security Act of 1974 (ERISA) governs the handling of company 401(k) plans—in this case, the LinkedIn Corporation 401(k) Profit Sharing Plan and Trust. This class action claims that those handling the LinkedIn plan have breached their fiduciary duties in regard to plan expenses and investment options. It brings suit against not only LinkedIn Corporation but also the Board of Directors and 401(k) Committee and their members during the class period.

LinkedIn 401(k) Retirement Plan Fiduciary Duties Complaint

Case Event History

LinkedIn 401(k) Retirement Plan Fiduciary Duties Complaint

August 14, 2020

The Employee Retirement Income Security Act of 1974 (ERISA) governs the handling of company 401(k) plans—in this case, the LinkedIn Corporation 401(k) Profit Sharing Plan and Trust. This class action claims that those handling the LinkedIn plan have breached their fiduciary duties in regard to plan expenses and investment options. It brings suit against not only LinkedIn Corporation but also the Board of Directors and 401(k) Committee and their members during the class period.

LinkedIn 401(k) Retirement Plan Fiduciary Duties Complaint
Tags: Breach of Fiduciary Duty, ERISA Violations, Employment Violations