In New Jersey, companies that operate a defined contribution retirement plan have a fiduciary obligation to the plan participants and beneficiaries. There has been a wave of lawsuits against companies for alleged breaches of these fiduciary duties. One of the major grounds of lawsuit against these employers is that they are paying excessive fees when they invest participants’ money.
Salesforce is one of the most recent companies to face a lawsuit on these grounds. The complaint accuses it of investing money in mutual funds that charged higher fees than the lowest possible amount. The plaintiffs claim that Salesforce could have taken advantage of the bargaining power that the size of its retirement fund afforded it to negotiate lower rates on the funds. However, Salesforce did not take the appropriate steps to manage the assets for the lowest possible costs.
The lawsuit contained other allegations against Salesforce related to its investment choices for the retirement plan. In general, the plaintiffs accuse the company of failing to consider options to mutual funds given the fact that there are lower-cost alternatives available. Companies must pay close attention to every single investment that the retirement plan makes and cannot incur more expenses than what is necessary.
You may have a cause of action against your employer if they fail to act in your interests when it comes to your retirement plan. ERISA imposes strict obligations on employers, and they could face legal consequences if they breach them. If you suspect that your employer has engaged in any one of a number of transactions that unnecessarily raise your fees, you may contact an ERISA attorney to find out whether you might be able to take legal action against them. You may be able to recover some of the excess costs that your employer has incurred.
