Plan Sponsors Could Face Wave of 401(k) Lawsuits
November 7, 2005
As Baby Boomers retire, a wave of lawsuits could be brought against their employers for their handling of 401(k) funds, Lawyers Weekly USA reports.
So far, 401(k) lawsuits have been limited to class actions against large corporations, but experts warn that smaller firms could be next and more individual suits are possible.
"I think there's going to be an influx of suits, because 401(k) plans have become the primary retirement vehicle for Americans," said Derek Loeser, of the Seattle law firm Keller Rohrback, who is a specialist in ERISA-type suits.
Loeser speculates that if a plan fiduciary is not doing its job carefully enough, it could be ascribed liability for fund shortfalls.
Plaintiffs can sue their companies for fund shortfalls if any of the following indiscretions have been committed: over-investing of the 401(k) in company stock, investing in high-fee mutual funds or undisclosed financial relationships.
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