401k Lawsuits Expected to Increase Five Times in 2020
by: The Knowledge GroupOctober 08, 2020
2020 is a year that has certainly brought more than its fair share of difficulties. Now, according to a new report from Bloomberg Law, class action suits pertaining to excessive 401k plan fees are expected to increase by five times in 2020 compared to the number of such lawsuits filed in 2019.
Bloomberg’s report cites a number of likely factors that have led to this massive increase in 401k lawsuits, including factors such as the aging laws in the Employee Retirement Income Security Act of 1974 (ERISA), new tools that have been made available to the attorneys who handle these cases, and even the COVID-19 pandemic, which has given out-of-work employees more time and incentive to analyze their 401k plans.
Over the years, complaints regarding poor investment choices and self-dealing have been common causes for 401k-related suits. However, lawsuits regarding excessive 401k fees have been on the rise and are now the catalyst for most 401k class action suits. While employers are not required to always offer the investment choices that have the lowest possible fees, these fees are required to be reasonable and are subject to review. Unfortunately, many employees are finding that the fees associated with the 401k investments that their employer oversees are not reasonable at all.
If you have a current 401k plan, it is important to take time to analyze it thoroughly and ensure that it is being handled properly by your employer in a way that minimizes the fees you have to pay. With the number of such lawsuits dramatically increasing, now is an ideal time to take a closer look at your own 401k. To give you all the information you need, The Knowledge Group have facilitated a number of webcasts on 401k plans, available live and on-demand.