The Seventh Circuit recently provided a ray of sunshine in what has largely been a gloomy stretch for plan sponsors and fiduciaries defending ERISA breach of fiduciary duty claims, based on allegedly excessive investment and administrative fees and investment underperformance.
In this particular case, Oshkosh emerged victorious on Aug. 29 with the Seventh Circuit affirming the dismissal of claims that it mismanaged its 401(k) plan by paying excessive recordkeeping fees, failing to ensure investment options were prudent, and unreasonably maintaining high-cost investment advisors. The case is Albert v. Oshkosh Corp.
Background
Andrew Albert, a former employee and participant in the Oshkosh 401(k) plan, advanced several ERISA fiduciary breach and prohibited transaction claims, based on what have become relatively common allegations related to excessive fees and investment underperformance.
First, Albert alleged that the plan paid excessive recordkeeping fees and failed to regularly solicit competitive bids. Second, he alleged that the plan paid excessive investment management fees and that the plan would have paid lower fees by investing in a more expensive share class with a revenue-sharing component that theoretically would rebate all revenue-sharing fees to the plan participants. Third, Albert alleged that certain actively managed funds should not have been offered because they are more expensive than passively managed funds. Fourth, Albert alleged that the plan offered...
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