Retreat from the High Water Mark: Breach of Fiduciary Duty Claims Involving Excessive Fees after Tibble v. Edison International
Journal of Pension Benefits, Vol. 18, No. 3, Spring 2011
9 Pages Posted: 10 Apr 2011 Last revised: 20 Oct 2011
Date Written: April 5, 2011
Boston ERISA attorney Stephen D. Rosenberg reviews the development of the law governing excessive fee litigation under ERISA involving 401(k) plans. Commencing with the United States Court of Appeals for the Seventh Circuit’s highly influential decision in Hecker v. Deere & Co., and continuing though a key federal court decision entered after trial in Tibble v. Edison International, Attorney Rosenberg demonstrates that the careful fact finding after trial in Tibble significantly undercuts much of the reasoning of the Seventh Circuit in its earlier decision in Hecker. Attorney Rosenberg then addresses the manner in which regulatory changes pursued by the Department of Labor under the Obama administration further undercut the approach taken by the Seventh Circuit in Hecker, and are instead consistent with the findings after trial of the federal district court in Tibble. The author addresses the manner in which the key case law and the relevant regulatory developments interact to create a framework that can decrease the likelihood of breach of fiduciary duty suits and of fiduciary liability.
Keywords: ERISA, 401(k), excessive fee, Hecker, Tibble
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