Another week, another excessive fee case settled. This time, it\u2019s 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.<\/p>\n
What Was the Case About?<\/strong><\/p>\n The suit, filed by participants Guy LaCrosse and Jojemar Mendoza, accused Jack Henry of two familiar sins:<\/p>\n 1. Excessive recordkeeping and administrative fees \u2013 The plan allegedly paid over $2 million between 2017 and 2022, averaging $78 per participant.<\/p>\n 2. Imprudent investment option \u2013 Specifically, the Prudential Guaranteed Income Fund, which plaintiffs argued was retained despite being a poor choice.<\/p>\n The original complaint dates back to October 2023, with the claims later expanded to include the Prudential GIF issue.<\/p>\n The Settlement Path<\/strong><\/p>\n Like most of these cases, it took time. A December 2024 mediation didn\u2019t produce a deal, but by January 2025 the parties had an agreement in principle: $1.6 million plus non-monetary relief. That \u201crelief\u201d includes a commitment by Jack Henry to issue RFPs for recordkeeping and administrative fees\u2014something most prudent fiduciaries should be doing anyway. The final settlement was nailed down after a July 2025 settlement conference.<\/p>\n Who\u2019s Covered?<\/strong><\/p>\n 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.<\/p>\n My Take<\/strong><\/p>\n 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 \u201csue me.\u201d<\/p>\n The real kicker here is that the settlement requires Jack Henry to do what ERISA already expects\u2014benchmark fees and consider competitive bids. If a lawsuit is what it takes to make that happen, it\u2019s an expensive lesson for plan sponsors everywhere.<\/p>\n Bottom line: Don\u2019t wait for plaintiffs\u2019 attorneys to do your fiduciary homework for you.<\/p>\n <\/span><\/p>","protected":false},"excerpt":{"rendered":" Another week, another excessive fee case settled. This time, it\u2019s 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 … Continue reading