Retirement Plan Excessive Fee Litigation Is On The Rise

Retirement plan sponsors and other fiduciaries are required by ERISA to discharge their duties with the "care, skill, prudence, and diligence" under the circumstances as would a prudent man. This means, among other things, fiduciaries should ensure that all fees paid by the plan for recordkeeping and investment management services are competitive and reasonable. Because such fees were often hidden historically and difficult to ascertain, plan sponsors did not always do a very good job in fulfilling this fiduciary function. As a result, plaintiff lawyers began bringing excessive fee claims against plan fiduciaries about 15 years ago and the number of claims have steadily increased over the years. Until recently, these claims were primarily filed by national plaintiff law firms against large publicly-traded companies with billions of dollars in plan assets which made for potentially large recoveries.