Companies that sponsor 401(k) plans prevailed this year in a couple of lawsuits filed by participants unhappy about plan fees. In the most important decision, the 7th Circuit Court of Appeals upheld a lower court's dismissal of a class action lawsuit against Deere & Co. The case, Hecker v. Deere, is one of a number of suits filed against big companies by a St. Louis law firm, Schlichter Bogard & Denton, arguing plan sponsors breached their fiduciary duties by offering overly expensive investment choices or failing to disclose revenue-sharing arrangements.
In Hecker, the courts said Erisa does not require plans to disclose revenue sharing and rejected the argument that the investments were too expensive, noting participants could access more than 2,500 mutual funds through the plan's brokerage window.
"The Deere case is very important because it's an appellate-level decision," says Andrew Oringer, head of the New York Erisa and executive compensation practice at Ropes & Gray.
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