Excessive Fees, Excessive Litigation: The Impact of ERISA Litigation in 2021

October 27, 2021

Employers sponsoring defined contribution retirement plans and the fiduciaries of such plans should be prepared to defend themselves and potentially be held labile in a lawsuit alleging that their retirement plans have paid excessive fees.

Traditionally filed against the largest of companies, the last several years have seen a surge in much smaller retirement plans facing excessive fee litigation; 2019 saw a plan with just $4.5 million in assets become a target of excessive fee litigation. Since 2015, there have been nearly 225 total excessive fee claims filed. From 2019 to 2020, the number of claims regarding excessive fees have increased nearly fivefold.

Plan fiduciaries should make it a priority to understand which of the plan features could allow the plan to become a target for litigation and take the necessary steps to reduce exposure to excessive fee litigation.

Beecher Carlson’s Executive Liability practice takes a deeper look at ERISA, available in our whitepaper below.

 

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