They got sued, so what?

If your plan is with a very large plan provider, you may be contacted by a competing provider that the incumbent has been sued. What do I think? Not much. If you’re big enough as a company, you will likely have been sued in one way or another. Civil litigation is way different from criminal litigation, there is a different level of proof for a trier of fact. A provider could have done nothing wrong, but still sued. It could be, just because they’re deep pockets. I was once sued as a fiduciary for a multiple-employer plan because I replaced a fiduciary that stole from another plan. Why did I get sued? I had fiduciary liability insurance.

Unless the plan provider is being sued for embezzlement fo fraud, I wouldn’t worry anything about it. So many of the current cases dealing with plans are just dependent on ERISA litigators, that merely want an easy settlement/score. Be concerned with the level of service that you get instead, as well as whether the fees are reasonable or not.

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