Wisconsin Becomes A Hotbed For ERISA Class Action Claims

In recent months, Wisconsin federal courts have witnessed a dramatic increase in class litigation raising breach of fiduciary duty claims under the Employee Retirement Income Security Act of 1974 (ERISA). These claims target sponsoring employers and individuals who oversee plan investments and plan fees for employer-sponsored 401(k) plans. Generally summarized, the causes of action typically claim that plan managers and administrators chose excessively expensive investment options and/or incurred high administrative fees that caused plan participants to suffer losses compared to other less expensive options available on the open market. A particular target of plaintiffs is the method of paying third-party recordkeepers known as "revenue sharing," which compensates recordkeepers based on the value of plan investments rather than a flat fee. Plaintiffs have sued company boards of directors as well. The relief sought includes the money that plan participants allegedly lost