Landmark Court Cases

Barker v. American Mobil Power Corp. 64F.3d 1397
• A court held that a fiduciary had an affirmative duty to inform participants about circumstances that could jeopardize benefits.

Unisys Savings Plan Litigation 74F.3d 420
• The court stated that the extent of information provided to participants is an essential element of a 404(c) defense.

LaRue v. DeWolff, Boberg & Assoc. February, 2008
• Paves the way for participants to sue on behalf of their own account.
• Justice Stevens "...Fiduciary misconduct need not threaten the solvency of the entire plan to reduce benefits below the amount participants would otherwise receive. "

Franklin v. First Union Corp. 23EB(281)
• The case was settled with First Union agreeing to pay $26 million without admitting liability. Plaintiffs claimed that the mutual funds available on the menu were Underperfoming.
• In addition, plaintiffs claimed that the funds had higher fees and lower returns than comparable investments.
• They also pointed to the fact that a human resources executive, with no investment background, and who was incapable of evaluating the investment options, was charged with the responsibility of determining the plan's investment menu.

Tussey v. ABB Inc.
• "...the Court finds that the Plan overpaid for Fidelity Trusts recordkeeping and administrative services ... "
• " Accordingly, the Court finds that the Plan suffered losses of $13.4 million as a result of ABE’s failure to monitor recordkeeping costs ... All ABE Defendants are held jointly and severally liable for this amount. "
• ERISA section 409 - "Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligation, or duties imposed upon fiduciaries by this title shall be personally liable ... "

Tibbie v. Edison

Court ruled that the investment committee violated ERISA's duty of Prudence by "not proper ly investigating the differences between selecting Retail & Institutional share classes. "

Beesley v. International Paper
• Excessive Fees
• Imprudent Company Stock Fund
• Imprudent Large Cap Stock Fund
• Vague Performance Reporting

Kim Nolte v. Cigna Corporation
• Plan not managed for exclusive benefit of participants
• Unreasonable fees
• Using proprietary funds
• No competition bidding
• Agreement not to move Plan

Never too Small $
• Perez v. Ferguson ($47,000)
• Perez v. Fisher ($34,000)
• Harris v. Koresko
• Fiduciary duties are the same whether the plan has $275,000 or $8.5 billion.

Sun Trust sued over operation of 401(k) Plan by a participant.

Lori Bilewicz files suit against Fidelity (FRM LLC) and the Investment Committee.

11/5/2013 Employees of Mass Mutual filed Class Action Suit against their employer alleging self-dealing and excessive fees.

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