Key highlights include:
- Recent proliferation of ERISA litigation has challenged the investment options and expense structures of 401(k) and other defined contribution plans, including claims asserting violations of ERISA §406’s prohibited transaction provisions.
- Such claims have appeal to plaintiffs’ counsel in part because they create liability for plan fiduciaries engaging in broad categories of transactions (including ones necessary to operate a benefit plan) unless a statutory or regulatory exemption applies.
- Some court reactions have placed the burden on fiduciaries to prove compliance with highly technical and amorphous conditions of exemptions.
- As a result, prohibited transaction claims have helped feed what has proven for defendants to be an expensive and nettlesome wave of litigation - leading fiduciaries in many cases to settle, with amounts paid commonly ranging well into the tens of millions of dollars.
Read this whitepaper now >