For participants in large retirement plans in Delaware and across the country, the management decisions affecting their plan could have significant effects on their future financial security. Employee benefits offered by private companies, including health care insurance, disability insurance and retirement plans, are protected under the Employee Retirement Income Security Act of 1974. ERISA requires that companies that offer these plans uphold their fiduciary duty to plan members, operating them in the interests of the members and not in personal or corporate interests. The law aims to safeguard these important employee benefits from corruption, malfeasance and poor decisions that squander members’ funds.
Salesforce is the latest large corporation to face a challenge under ERISA to the management tactics it adopted for its retirement plan. Salesforce, its board of directors and its investment committee are facing a class action lawsuit filed by plan participants and beneficiaries, charging that they did not take action to prevent excessive fees and costs associated with the plan’s investments. The plaintiffs say that if the company had made wiser financial decisions that reflected its fiduciary responsibilities, plan members would not have lost out on funds spent on management fees.
They say that the company did not work to minimize plan expenses, for example, by ensuring that they purchased the lowest price share class for holdings in mutual funds. They also say the company did not explore lower-cost options that provided equal or better returns. The company, on the other hand, claims that it has adjusted its investment options over time to reflect best practices and now uses those lower cost shares.
Many people rely on their employee benefits to support their basic needs, including retirement income and health care. An ERISA benefits claims attorney may help employees affected by bad corporate decisions to seek accountability and compensation.