401(k) lawsuits have surged in recent years. This development has
been widely reported, but the extent to which employers of all
sizes are potential targets might not be so clearly
understood.
Most 401(k) plan lawsuits challenge either the investment
options offered under the plan or the administrative and investment
management expenses that are paid by plan participants. Plan
sponsors and fiduciaries should have robust procedures in place to
review and monitor both the available investment options and plan
fees and expenses. (In most 401(k) plans, fees and expenses are
passed on to plan participants.) Further, plan
fiduciaries should always document the process followed and the
reasons for any decision reached, even if the decision is to
continue plan operations without change. A plan is not required to
select the lowest-cost provider, but the best defense against a
lawsuit is meaningful documentation that the plan fiduciaries
engaged in a thoughtful process and
