Shell Oil 401(k) Plan Fiduciary Duties ERISA Class Action

The Employee Retirement Income Security Act (ERISA) governs retirement plans and other benefits at large companies and specifies that plan administrators and trustees have a fiduciary duty to act for the exclusive benefit of plan participants. In this class action, the complaint alleges that Shell Oil Company and various other defendants, some associated with Fidelity investment companies, violated their fiduciary duties in connection with the Shell Provident Fund 401(k) Plan. The complaint alleges that the defendants breached their duties “to ensure that Plan expenses are reasonable and the Plan’s investments are prudent.”

The class for this action is all participants and beneficiaries of the Shell Provident Fund 401(k) Plan between January 21, 2014 through the date of judgment in this case. A subclass has also been defined of all participants and beneficiaries of the Shell Provident Fund 401(k) Plan who used the Plan’s managed account services between January 21, 2014 through the date of judgment in this case.

The complaint begins its arguments by asserting that the marketplace for retirement plan investments is competitive. “Multi-billion-dollar[] defined contribution plans, like the Plan, have tremendous bargaining power to obtain high-quality, low-cost administrative, managed account, and investment management services.” 

Also, fiduciaries of such plans have the duties of loyalty to the interests of the participants and prudence in selecting investment offerings. This means, among other things, that expenses charged to participants should be good or reasonable, and that offerings should be selected with care, monitored, and removed if they do not perform well.

However, the complaint says, “instead of using the Plan’s bargaining power to benefit participants and beneficiaries, Shell Defendants allowed unreasonable expenses to be charged to participants for administration of the Plan and managed accounts services, failed to even monitor numerous funds in the Plan at all, and retained poorly performing investments that similarly situated fiduciaries removed from their plans.”

What’s even worse, the complaint says, is a violation of participants’ privacy Shell allegedly granted to the Fidelity defendants (FMR, LLC, Fidelity Investment Institutional Operations Company, Inc., Fidelity Brokerage Services, LLC, Fidelity Personal and Workplace Advisors, LLC, Fidelity Investment Life Insurance Company, and Fidelity Personal Trust Company FSB). The complaint alleges that Shell allowed the Fidelity companies to use participants’ personal data, such as social security numbers, financial assets, and investment choices, “to aggressively market lucrative non-Plan retail financial products and services, which enriched Fidelity Defendants at the expense of participants’ retirement security.”  

The complaint alleges breaches of fiduciary duties and prohibited transactions, among other things.

 

Article Type: Lawsuit
Topic: Investments
Tags: ERISA Violations, Employment Violations, Prohibited Transactions, Retirement Plan Mismanagement, Sharing Personal Information with Third Parties