ERISA Excess Fee Litigation: Waiting for the Deluge

A few months ago I did a webinar presentation for on the 2016 ERISA litigation. The central theme was sensible plan sponsors would be forced by it to look at their fiduciary process and tighten them up if warranted. I noted in that presentation, as have others who comment in this area, that the litigation is moving downstream to smaller plans and that this ought to be a source of worry for small plan sponsors.

Further evidence of this trend arrived in the last few weeks in the form of lawsuits filed against the fiduciaries of Gucci America, Inc. Retirement and Savings Plan and the Novitex Enterprise Solutions, LLC 401(k)) Plan.  Both complaints allege that plan fiduciaries breached their fiduciary duties by:

  • Failing to disclose to participants the risks of the Plan’s investment options
  • Allowing unreasonable expenses to be charged to participants for administration of the Plan
  • Selecting opaque, high cost and poor performing investments instead of other available more prudent investments.

No one knows how this litigation will be resolved but we do know that plaintiff attorneys have struck once again on the excess fee issue. We also know that that strike was against the fiduciaries of a relatively small plans with $100MM-plus in assets – not billion dollar plans.


Two things come to mind: 

  • It’s exceedingly easy to gather information on plan fees from 5500 filings. It is in the public domain on the Labor Department website for everyone to see. Participants, vendors and attorneys will find opportunities to use it. If a plan is paying excessive fees someone will find out.
  • Just about any law firm can now get in on this action. Before it was St. Louis-based Schlichter Bogard & Denton. This is no longer true. It doesn’t take much to copycat an electronically previously filed complaint and use it for another. This means to me there will be more of these cases

As I mentioned earlier, the cautious fiduciary will want to be sure they have practices in place that derive reasonable, non-excessive fees for services provided their plans. In later blogs I’ll talk about what these practices might look like.



Chuck Humphrey is principal of Law Offices of Charles G. Humphrey, a firm concentrating its practice in the field of employee benefits and fiduciary law. He is the author of the Fiduciary Responsibility eSource available at