Mutual Fund ERISA Lawsuits in the News

Dallas, TXMore and more frequently, news of mutual fund ERISA lawsuits are making their way into the headlines. Lawsuits are being filed by employees who argue that the assets in their 401(k) plans and other retirement savings plans are being grossly mismanaged by plan fiduciaries. One of the most common complaints is that the fiduciaries are acting in the best interests of the company, rather than in the best interests of plan participants.

One of the major areas of concern is that excessive fees are being charged for plan management. In many cases, a plan's fees are not fully disclosed, but those fees can add up, even if they initially seem small.

In some situations, financial companies offer their own mutual funds to employees. However, mutual funds are not generally recommended for plans that have a high value. Plans with more than $30 million have enough financial clout to deal with their own money manager and negotiate lower fees. Therefore, employees whose money is improperly put into mutual funds are likely paying far more in fees and charges than they should be.

This ultimately means that employees who invest in such plans have less in their retirement plans than they expect to have. This is completely unnecessary, especially in cases where mutual funds have enough money to negotiate their own fees. A plan's assets should be invested to best make money for plan participants, not for the company sponsoring the plan.

By not putting the interests of plan participants ahead of the interests of the company, plan managers are violating their fiduciary duty. Now, employees are fighting back by filing lawsuits against their plan managers. They allege that their money is being improperly invested and their plans carry too many excessive fees.

Many lawsuits that are filed seek punitive and compensatory damages from the defendants. The courts appear to be more and more likely to side with plaintiffs when plan managers have violated their fiduciary duties, going so far as to allow individual plan participants to file their own lawsuits when their account has suffered losses due to fiduciary breaches.

If you believe that your mutual fund plan is being improperly managed and you are paying excessive fees because of a breach of fiduciary duty, contact a lawyer, who can help determine your eligibility to join a class action lawsuit.