The legal pressure on such companies continues to mount. Three months ago, for instance, financial experts appeared before a congressional hearing related to excessive 401(k) fees.

1. LAWCROSSING
THE LARGEST COLLECTION OF LEGAL JOBS ON EARTH
GCC NEWS FEATURE www.lawcrossing.com 1. 800.973.1177
401(k) Fee Suits on the Rise
[By Anique Gonzalez]
Following the surging trend of employees filing lawsuits against their employers, employers have yet another reason to be wary: 401(k) plans. Recently, fees
associated with 401(k) plans have come under close scrutiny and are resulting in mounting lawsuits against small and large corporations alike.
The timing of the suits, whether planned or question were “excessive,” “unreasonable,” information associated with 401(k) fees
not, coincides with investigations by three or related to “revenue sharing.” charged to employees. Moreover, the legal
federal entities: the U.S. Department of pressure on such companies continues to
Labor, the U.S. Securities and Exchange However, Schlichter Bogard is not the mount. Three months ago, for instance,
Commission, and a congressional only firm filing suits. Keller Rohrback and financial experts appeared before a
committee. These inspections are looking McTigue & Porter have also filed similar congressional hearing related to excessive
into the fees employees must pay for claims against major corporations such 401(k) fees.
401(k) plans, mutual funds, annuities, and as ING Life Insurance Annuity Company,
other retirement programs, as well as the General Motors Corporation, and Radio Thus far, the likely outcome of these cases
accessibility of the information associated Shack Corporation. These claims not only is unclear. What is clear, though, is this: if
with those fees. Interestingly, some suits address the availability of fee information but 401(k) suits are increasingly found in favor
are even going after employees who are also whether offering plans with excessive of employees, the number of lawsuits filed
aware of excessive fees but choose to fees is in the best interest of the employee. will drastically rise and the landscape of
participate in such plans anyway. 401(k) and associated retirement plans will
The majority of the suits filed by Schlichter dramatically be altered by companies and
Starting in the fall of 2006, Schlichter, Bogard have been able to withstand motion- the government alike.
Bogard & Denton began filing class action to-dismiss claims filed by the defendants,
lawsuits claiming the companies they filed although not all claims have been found On the Net
against, including The Boeing Company, in the firm’s favor. A case against Exelon
Kraft Foods, Inc., and Bechtel Group, Corporation, for example, was dismissed after Schlichter, Bogard & Denton
Inc., did not act in good faith. Namely, a judge found that there were no unwarranted www.uselaws.com
they allegedly permitted intermediaries fees associated with the company’s 401(k)
to charge employees unnamed and often plan. Additionally, in another claim, a federal U.S. Department of Labor
excessive fees in relation to their 401(k) judge rejected defendants in a case against www.dol.gov
plans. Thus far, Schlichter Bogard has filed Northrop Grumman.
13 suits in all. U.S. Government Accountability Office
It is likely the number of suits will continue www.gao.gov
The claims have been filed under ERISA, to grow in the coming years. The U.S.
the Employee Retirement Income Security Government Accountability Office released
Act of 1974, which the firm believes will a report stating that increasingly mutual
substantiate the allegations that the fees in fund companies do not properly divulge
PAGE