Pension and 401(k) Class Actions
Protecting Plan Participants
Pension funds and 401(k) plans are intended to provide participants with a safe and stable way to invest their hard-earned income for retirement. Retirement fund administrators have a duty to act prudently when making investment decisions and monitoring both the returns of the retirement plan’s investments and the fees charged to the plan for investment services. Failure to do so can cost participants their retirement savings and give rise to a legal claim for relief.
Schneider Wallace Cottrell Konecky Wotkyns LLP is a national class action litigation law firm that handles complex pension claims. Our lawyers have decades of combined experience recovering the losses of pension and 401(k) plans through complex litigation.
Fiduciary Duties Involving Retirement Fund Fees
Although almost all investments incur fees, excessive fees may indicate a breach of the retirement fund’s fiduciaries to monitor those investments and fees. Our attorneys look for patterns that demonstrate that too much money is being spent on unnecessary services and/or excesive fees. These fees may include:
- Layered Fees. Investors may pay management fees twice for the same assets. Layered fees often occur when pension participants invest in a fund that invests in another fund and are charged management fees at each level.
- Mutual fund sales charges. Sales charges may be applied as a front-end load, which reduces the amount of the participants’ initial investment, or as a back-end load, which may be calculated in a variety of advantageous or disadvantageous ways.
- Management fees. Management fees may be necessary to cover research and monitoring of a fund, but should be minimal when investing in conservative funds with limited volatility.
- Revenue sharing. Revenue sharing is marketed as a means of covering the day-to-day operations of a 401(k), and has generated a lot of attention amongst critics as a form of kickback.
- 12b-1 fees. 12b-1 fees are ongoing fees that cover commissions, servicing, administration and marketing of mutual funds that are often advertised as “no-load,” which can give the impression that fees are not incurred.
Fiduciary Duties Involving Prudent Investment
Many pensions and 401(k) plans are intended to serve as low-risk investments for participants. For this reason, these retirement funds generally yield modest returns. High-yield, high-risk investments may be unsuitable for some types of plans.
The plan’s fiduciary has a duty to choose the right investments and to monitor those investments throughout the life of the fund. If an investment performs poorly or if its investment rating is downgraded, the fiduciary has a duty to remove the investment. These duties have been continuously affirmed by the U.S. Supreme Court, and our experienced attorneys are continually investigating potential breaches of plan fiduciaries’ duty to monitor a retirement plan’s investments and fees.
Schedule a Consultation to Discuss a 401(k) or Pension Class Action
Schedule an appointment with Schneider Wallace in the San Francisco Bay Area, Texas or Arizona. Our experienced team of lawyers handles class action lawsuits involving 401(k)’s, pensions and ERISA matters. We are a national firm and by partnering with local firms, we can assist clients in any jurisdiction.