When the Supreme Court took a worker-friendly approach on behalf of Cornell University’s 28,000 employees in a 403(b) excessive fees suit in April, some industry experts worried that its ruling might burden plan fiduciaries and open the floodgates for similar litigation. Now Stifel Financial Corp. is facing allegations that it paid unreasonable administrative fees for its employee retirement plan.
The new class-action lawsuit, Dell v. Stifel Fin. Corp., alleges that actions taken by the Stifel Financial Profit Sharing 401(k) Plan’s fiduciaries were “contrary to actions of a reasonable fiduciary and cost the plan and its participants millions of dollars.” The 401(k) plan’s average fee of $79 per person between 2019 and 2023 was 182 percent higher than the average fees for comparable retirement plans, according to the suit filed on July 4 in the U.S. District Court for the Eastern District of Missouri.
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Plaintiffs Amanda Dell, Joshua Thompson, Lamar Vaughn-Nolden, Michael House, and Michael Madras filed suit “on behalf of the Stifel Financial Profit Sharing 401(k) Plan, themselves, and all others similarly situated.”
The plaintiffs claim that Stifel “breached the duties it owed to the plan … failing to pay reasonable fees for [recordkeeping and administrative] services with respect to the plan and failing to objectively and adequately review the plan’s investment portfolio, initially and on an ongoing basis, with due care to ensure that each investment option was prudent in terms of performance.” The plaintiffs also allege that the plan’s investment of “substantial assets” in an Empower guaranteed income fund “carried significantly more risk and provided a significantly lower rate of return than other comparable stable value funds.”
In a similar lawsuit, Pentegra Retirement Services agreed to settle with 26,000 bank employees and retirees for $48.5 million in a case tied to a multiemployer 401(k) plan that alleged the company charged unreasonable fees and engaged in prohibited transactions. The Pentegra case was yet another win for law firm Schlichter Bogard, which has been representing many plaintiffs in the onslaught of 401(k) and 403(b) excessive fee cases over the past few years. Jerry Schlichter, founder of Schlichter Bogard, is a pioneer in legal action against 401(k) and 403(b) plan sponsors on behalf of retirees and savers.
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From: BenefitsPRO
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
