The Recent DOL Ruling That 401(k) Sponsors Need to Know About

The DOL took a relatively unnoticed, but highly significant step last month that could influence the increasing number of 401(k) lawsuits.

The action involves a lawsuit filed by employees at Deere & Co. against both the company and their 401(k) provider, Fidelity Investments. The suit, like others being filed by employees at other companies, alleged that both Deere and Fidelity were in breach of their fiduciary responsibilities due to the plan’s unreasonable and excessive fees and expenses. The suit was dismissed last year by a federal judge.

Last month, however, the DOL stepped into the appeals process by filing a brief requesting that the judge’s ruling be reversed by the appeals court.

This is an interesting action the DOL did not have to take. Regardless of how this turns out, it’s clear that people in influential places are paying close attention to the fees being paid by 401(k) plan participants. And it’s also clear many don’t like what they’re seeing.

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