Class Actions I bring
To Fiduciaries of your plan
Glad tidings of litigation
And a happy New Year!
Fiduciary Litigation made its appearance during this holiday season as 4 new Class Actions were filed against the following institutions:
. Starwood Hotels & Resorts
. Delta Air Lines
. Fidelity Management Trust Co.
. Putnam Investments
In aggregate, the following claims were made:
. Failure to make sure that Plan fees were reasonable
. Failure to offer a Stable Value fund
. Revenue sharing whereby kickbacks were made for including particular funds in the menu of investment choices
. Incurring unnecessary management fees by offering passive index funds which held other passive index funds (double layer of fees)
. Lower cost investment options were available; incorrect share class
. Excessive record-keeping/administrative charges
. Redundant investment options
. Retained historically underperforming investment options
. Excessive indirect compensation through revenue sharing
. Poor performance in Stable Value Fund
These claims seem to focus on performance outcome, fees, and compensation. The Fiduciary Relationship between a Plan Fiduciary and its Participants can be defined by the behaviors and duties that the fiduciary has for the participants. Interesting enough, I did not sense any motivations to focus on breaches of Fiduciary Duty via a lack of visible oversight and methodology as the causation of outcome.