International Paper is paying $30 million in a settlement for a class action lawsuit concerning their 401(k) plan for claims resulting on having their own stock in the plan, unreasonable hidden plan expenses, and fraudulently reported performance histories. Cigna paid $35 million in claims over their Plan.<\/p>\n
Most plans aren\u2019t big enough to have a class action lawsuit against them, but they have other fears that plan sponsors aren\u2019t even aware of. While a $1 million plan isn\u2019t going to be sued by an ERISA attorney in a class action lawsuit unless they\u2019re starving, retirement plans can be targeted by an employee or two to get a quick, inexpensive settlement or the government can audit them.<\/p>\n
In the old days, it was kind of a blue line that most plan participants never crossed and the courts didn\u2019t recognize a participant\u2019s right in making sure that plan expenses are reasonable.<\/p>\n
It\u2019s 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.<\/p>\n
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.<\/p>\n
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