Taylor Corp. Retirement Plan Recordkeeping Fees ERISA Class Action

Retirement plans are governed by the Employee Retirement Income Security Act (ERISA), which specifies that those responsible for the plans owe the fiduciary duties of prudence and loyalty to the participants and beneficiaries. This class action brings suit against the fiduciaries of the Taylor Companies 401(k) and Profit Sharing Plans (referred to in the complaint as the Plan), including Taylor Corporation, the Board of Directors and its members, and the Fiduciary Investment Committee and its members, alleging they have breached their fiduciary duties.

The class for this action is all persons who were participants in or beneficiaries of the Plan at any time between February 14, 2016 and the date of judgment in this case.

The complaint quotes the Department of Labor as saying that companies are to have a “high standard of care and diligence” and must, among other things, “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.”

Even small differences in fees can have a big effect on the final investment results over a long period of time, the complaint says, adding up because the participant loses not only the original amount paid in fees but the additional earnings they might have generated over time.

According to the complaint, the Plan had at least $575 million in assets at all times considered by this case and more than 12,000 participants, qualifying it as a large plan and giving it substantial bargaining power in terms of fees and expenses. Despite this, the complaint alleges, the Plan paid out excessive amounts for recordkeeping.

The complaint alleges that the Plan paid for recordkeeping under a system of revenue sharing, which the complaint calls “extremely costly for participants.” It claims that it saddled the participants with “excessive, above-market recordkeeping and administrative fees.”

The complaint alleges a flat, per-participant fee would have been better. It displays a number of charts, including one breaking out the amounts paid into a per-participant figure, and another comparing them with per-participant fees for similarly-sized plans. The Plan is shown as having paid more than $79 per participant, while other plans paid between $18 and $35

The complaint alleges, “Defendants’ mismanagement of the Plan, to the detriment of participants and beneficiaries, constitutes a breach of the fiduciary duty of prudence…. Their actions were contrary to actions of a reasonable fiduciary and cost the Plan and its participants millions of dollars.

The counts include breach of the fiduciary duty of prudence and failure to monitor fiduciaries.

Article Type: Lawsuit
Topic: Employment
Tags: Breach of Fiduciary Duty, ERISA, Employment Violations, Retirement Plans