Skip to main content

What is inflation? How long will it last? Watch "Inflation on the Rise" for answers.

Excessive Fee Litigation Banner Image

Excessive Fee Litigation: The Best Defense is Compliance

Photo of author, Monica Garver, CPA, CFP®, AIFA®, CDFA®.
Monica Garver, CPA, CFP®, AIFA®, CDFA®
Director of Retirement Plan Services and Financial Strategist

Excessive fee litigation is increasing at a steady pace and all signs are it will continue to increase. The positive side of this situation is that we now have more caselaw to consider as we work toward compliance in creating a “best defense”. Early caselaw did not reflect the consistency of court decisions. Some court rulings were in direct conflict with those of other courts, and some did not seem well reasoned.

Recent excessive fee caselaw does help us determine a more solid foundation for liability mitigation. Clearly, it is most important to have a robust process for making prudent investment decisions, as per ERISA “procedural prudence”. This has always been the case, but now we have more clarity in how this process should be conducted. Courts want to see evidence that based on the information that the fiduciaries had at the time they made their decision; a robust structured process was followed. As always, it is crucial that you follow your investment policy statement and document your process and reasons for all fiduciary level decisions.

Related Insights
Qualified May2022 Article3

Fee Litigation with an Odd 'Twist'

This article highlights a case whereby the plaintiffs have asserted claims for breach of the fiduciary duties of prudence and failure to monitor fiduciaries. The lawsuit also targets members of the board of directors, as well as other officers of the firm who serve on the retirement plan’s fiduciary investment committee. Learn about the simple way of to offset such liability.

Read More
Qualified May 2022 Article2

IRS/DOL Audits Are Increasing Dramatically Are You Ready?

This article speaks of IRS/DOL Audits and provides a laundry list of items for potential review during an audit. Quite a long list – How would your plan fare in being able to check off these items? Learn more.

Read More
Qualified May2022 Article1

The Risk of 401(k) Lawsuits: If It Can Happen to Them…

This article discusses a national accounting and consulting firm who was sued for excess fees. The bottom line: It behooves the prudent fiduciary to explore every avenue to protect themselves whilst acting in the best interests of their participants.

Read More
Play