Plan sponsors will say it all the time: they are too small to be sued in a class action lawsuit. That may be true, but a class action lawsuit isn’t the only thing to fear.
Most plans aren’t big enough to have a class action lawsuit against them, but they have other fears that plan sponsors aren’t even aware of. While a $1 million plan isn’t going to be sued by an ERISA attorney in a class action lawsuit unless they’re starving, retirement plans can be targeted by an employee or two to get a quick, inexpensive settlement or the government can audit them.
In the old days, it was kind of a blue line that most plan participants never crossed and the courts didn’t recognize a participant’s right in making sure that plan expenses are reasonable.
It’s been quite some time that unreasonable plan expenses have been an issue for plans and it went from plan sponsors winning on every turn into what looks like a Washington Generals type losing streak.
The days where plan sponsors can look the other way about their retirement plan is long over. They either need to shape up or get shipped out by participants and/or the Department of Labor.