A district court judge has ruled that Oracle will in have to defend itself regarding its 401(k) Plan.<\/p>\n
Plaintiffs allege the Oracle Corporation 401(k) Savings and Investment Plan \u201ccaused participants to pay recordkeeping and administrative fees to Fidelity that were multiples of the market rate available for the same services.\u201d<\/p>\n
In addition, the complaint says, Fidelity \u201cis the sixth largest institutional holder of Oracle stock, owning over $2 billion shares.\u201d<\/p>\n
So the plaintiffs suggest, Fidelity \u201chas the influence of a large stockholder in light of its stock ownership.\u201d The result is that \u201cOracle has chosen and maintained funds from one of its largest shareholders, Fidelity, to be investment options in the plan.\u201d Plaintiffs suggest this relationship has led to conflicts of interest that have harmed participants and retirement plan performance.<\/p>\n
I can\u2019t opine on Oracle\u2019s chances in the lawsuit, but it confirms everything I\u2019ve ever said regarding the choice of plan providers. Choosing plan providers where there is some underlying relationship that implies that the choice of plan provider was done to benefit the plan sponsor is something to avoid. Any suggestion of impropriety will lead to an ERISA litigator alleging that something improper was done even if it wasn\u2019t improper. I think Oracle shouldn\u2019t have selected a bundled provider like a Fidelity or any other large mutual fund company because of the likelihood that provider is an institutional shareholder of the employer. If it looks improper, avoid it.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" A district court judge has ruled that Oracle will in have to defend itself regarding its 401(k) Plan. Plaintiffs allege the Oracle Corporation 401(k) Savings and Investment Plan \u201ccaused participants to pay recordkeeping and administrative fees to Fidelity that were … Continue reading