New York Times business columnist Gretchen Morgenson gave a shout out March 30 to attorney Jerome Schlichter for his work in lowering 401(k) plan fees. Over the past eight years, Schlichter’s lawsuits have resulted in six settlements totaling $125 million, with five more cases pending. Meanwhile, Morgenson notes, the DOL has pursued two cases resulting in $28.9 million in recoveries.
In an interview last fall with NAPA Net the Magazine, Schlichter noted that he was surprised that the DOL is not more active in what he perceived to be clear abuses. He estimates that his actions have shaved 20 BPs off 401(k) fees, which would amount to over $10 billion in savings.
Clearly, ERISA litigation has hit the big time. The U.S. Supreme Court is scheduled to hear the Fifth Third case on April 2 and will rule on the Moench presumption for company stock. And just last week the Court signaled its interest in hearing the Tibble v. Edison case.
Before Schlichter began his crusade, most cases focused on company stock, not high plan fees — perhaps lulling plan sponsors and providers into a state of complacency. But with 401(k) fee cases now front and center, more plan sponsors, who must act as a prudent expert, have turned to hiring experienced and trained plan advisors.
