Another week, another excessive fee case settled. This time, it’s Jack Henry & Associates Inc., a well-known technology provider, and its 401(k) retirement committee agreeing to a $1.6 million settlement in a fiduciary breach case under ERISA.
What Was the Case About?
The suit, filed by participants Guy LaCrosse and Jojemar Mendoza, accused Jack Henry of two familiar sins:
1. Excessive recordkeeping and administrative fees – The plan allegedly paid over $2 million between 2017 and 2022, averaging $78 per participant.
2. Imprudent investment option – Specifically, the Prudential Guaranteed Income Fund, which plaintiffs argued was retained despite being a poor choice.
The original complaint dates back to October 2023, with the claims later expanded to include the Prudential GIF issue.
The Settlement Path
Like most of these cases, it took time. A December 2024 mediation didn’t produce a deal, but by January 2025 the parties had an agreement in principle: $1.6 million plus non-monetary relief. That “relief” includes a commitment by Jack Henry to issue RFPs for recordkeeping and administrative fees—something most prudent fiduciaries should be doing anyway. The final settlement was nailed down after a July 2025 settlement conference.
Who’s Covered?
Roughly 8,278 plan participants are expected to benefit. With $1.3 billion in plan assets and over 8,000 participants, this was not a small plan by any means.
My Take
This settlement is another reminder that process matters. Excessive recordkeeping fees are the low-hanging fruit for class-action attorneys, and keeping an imprudent fund on the menu is like putting up a neon sign that says “sue me.”
The real kicker here is that the settlement requires Jack Henry to do what ERISA already expects—benchmark fees and consider competitive bids. If a lawsuit is what it takes to make that happen, it’s an expensive lesson for plan sponsors everywhere.
Bottom line: Don’t wait for plaintiffs’ attorneys to do your fiduciary homework for you.