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Will your 401(k) plan participant sue you personally just like Fidelity, Mass Mutual and Ameriprise employees?

Will your 401(k) plan participants sue you personally just like Fidelity, Mass Mutual & Ameriprise employees?


Yes, Fidelity, MassMutual, and Ameriprise are all defendants of 401(k) lawsuits regarding their own company 401(k) plans!!  Their employees are alleging their employer’s, put their interests first because of self-dealing, excessive fees and limited by proprietary investment options in their administration of their company 401(k) plan! 


History:  The Employee Retirement Income Security Act (ERISA) of 1974 protects employee benefits.  With regard to 401-k plans, it mandates that Plan Sponsors have a Duty of Loyalty when selecting and monitoring service providers and plan investments, to act prudently and solely in the interests of the plan participants. In 2012 ERISA added two regulations 404(a) and 408(b)(2) requiring full and timely disclosure of all plan features that impact investments and all related fees or costs charged to the plan.  


Do you know?

1.      Plan Sponsors are 100% personally liable for any mismanagement of a plan.

2.     The 401(k) fiduciary rules say that the stock broker cannot give advice to the company (plan) or to the employees, even if their business card says they are a financial advisor. These firms know that there brokers have no expertise and could accidentally do something that would make their firm a fiduciary.

3.     Some fiduciaries choose to cut out the advisors altogether thinking they are cutting out cost. Unfortunately your investment advisor could have a plan with lower total costs. In addition, going it alone means that you must stay self-educated on all of your fiduciary responsibilities.

4.     Some fiduciaries mistakenly think that the brand name record keeper take on the liability of the plan.  Paychex and other providers are now partnering with independent Investment Advisers.

Now is the time for YOU to review the 401(k) plan!!


The increasing actions from the Department of Labor investigations, ERISA regulation changes and increasing class action lawsuits is showing that “set it and forget it” plan implementations are risky. We know you will be better off getting an assessment from an Accredited Investment Fiduciary like Endowment Wealth Management.




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Comment   |  6 years, 3 months ago from Milwaukee, WI