Law Week Colorado Interviews Kirsten Stewart on a recent 401 (k) Lawsuit
February 15, 2018 – Kirsten Stewart was recently interviewed by Law Week Colorado regarding Troudt v. Oracle Corp. This lawsuit alleges Oracle incurred unreasonable expenses on its 401 (k) plan by paying uncapped fees to plan trustee Fidelity Management Trust using a revenue-sharing model based on the plan’s assets, rather than a fixed-fee model tied to the number of participants. This lawsuit was filed back in 2016 under the Employee Retirement Income Security Act.
The complaint claims Oracle used Fidelity Management Trust since 1993 without ever fee-shopping for lower costs. The plan’s assets also increased from $3.6 billion to more than $11 billion between 2009 and 2014. Which also meant Fidelity’s revenue also increased significantly, despite no change in the services it provided. “I think we always look at these cases to see what could have been done a little bit better, and how we can find best practices,” Ms. Stewart said.
“The argument is that it costs as much to run a plan when it comes to 1,000 participants in some instances as it does if you have 20 participants. But I think it’s just something that each plan fiduciary and committee has to walk through in determining what the best way of allocating those assets would be,” Ms. Stewart said after stating that some companies use the flat-fee model for 401 (k) plans more commonly than a model based on plan assets.
Click here to read the full article.
“Another Year, Another 401(k) Suit,” Law Week Colorado. February 15, 2018.