It Happened, It Happened: Small 401(k) Plan Sued

I love boxing and one of my favorite fights is when George Foreman shocked the world and knocked out Michael Moorer to become heavyweight champion at age 45. Jim Lampley doing the HBO broadcast proclaimed: “it happened! It happened!”

When the first big lawsuits started going against some large 401(k) plans, naysayers like this fellow on LinkedIn named Elmer said that talking about fees and fiduciary issues to small to medium sized 401(k) plan is meaningless because small to medium sized 401(k) plans don’t get sued.

I always said that just because small to medium sized plans weren’t sued doesn’t mean that they won’t be sued in the future.

Well, it happened, it happened.

A new class-action lawsuit was filed in federal court in Minnesota that targets excessive 401(k) fees in a $9 million plan. The suit, Damberg v, LaMettry’s Collision Inc., claims that plan fiduciaries breached their duties under ERISA for allowing excessive fees to be charged for plan investments, record keeping, and administration.

What does it mean? It means that the threat that financial advisors and ERISA attorneys like me having been saying for years is finally a reality, small plans can be sued.

If you have a small to medium sized 401(k) plan or know someone that does, maybe it’s time to have a discussion about plan fees if a discussion hasn’t taken place before.

This entry was posted in Retirement Plans. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *