Schlichter Bogard Managing Partner Jerry Schlichter Quoted in Pensions & Investments Article Discussing MEP ERISA Lawsuits
In an article discussing the rising tide of Employee Retirement Income Security Act (“ERISA”) class action lawsuits against multiple employer plans (“MEPs”), Pensions & Investments Daily sought input from Managing Partner Jerry Schlichter regarding what management distinctions, if any, exist between MEPs and more traditional single-employer plans. The article emphasizes that “MEP providers are encountering the same ERISA challenges to their 401(k) or 403(b) plans as those faced by single-employer sponsors,” noting that “allegations range from excessive investment fees to poorly performing investments to inadequate monitoring of administrative costs.”
Asked whether he believes MEPs “present significant differences in 401(k) plan management vs. single-employer plans,” Mr. Schlichter responded in the negative. He opined: “From our perspective, these [MEPs] are not difficult, complicated plans to record keep. […] We don’t see a big difference in multiple employer plans compared to single-employer plans” with regard to standard fiduciary practices—or the failings related thereto that result in lawsuits. The article’s collective interviewees echoed the prediction that this “trend in MEP lawsuits likely will encourage plaintiffs to file similar lawsuits against providers of pooled employer plans [or ‘PEPs’].”
The article highlights Schlichter Bogard & Denton’s success in penning a $39.8 million settlement deal with Reliance Trust Co., negotiated based on “participants’ allegations of Reliance making ‘imprudent’ investment decisions, including selecting and retaining ‘its own high cost and poorly performing investments,’ [as relayed in] the original complaint.” The article additionally cites pending lawsuits against MEP administrators Pentegra—involving allegations including “the charging of high administrative fees, failing to monitor costs and failing to conduct competitive bidding for several years for administrative services relating to its $2.1 billion asset 401(k) plan”—and ADP Inc.—involving allegations that “ADP failed to monitor the plan’s record keeper’s offering of products, … [creating] a conflict of interest.”
We are proud to be pioneers in 401(k) and 403(b) litigation. Visit our website to learn more about other high-impact cases handled by Schlichter Bogard & Denton. For additional information about Schlichter Bogard & Denton’s Retirement practice, please contact us at 800-873-5297 or via email at contact@uselaws.com.
