Workers in Delaware and elsewhere do not have to endure losses caused by mistakes made or wrongful acts done by those who are supposed to protect their retirement accounts. A recent $17 million class-action settlement affirms that employers are liable for ERISA violations that inflict financial losses on workers. That includes forcing workers to make unwise investments in the parent organization.
A fiduciary responsibility means a designated party has legal control of an asset and must take reasonable steps to protect those assets. The class-action ERISA case in question accused employer Neuberger Berman Group of fiduciary duty violations by including the firm’s shares among those held for retirement investment plans. The investments were at rates that greatly favored Neuberger Berman and included large fees, which resulted in financial losses for workers, the complaint claimed.
Rather than continue the legal fight, Neuberger Berman agreed to pay $17 million to settle claims in the class action without acknowledging any wrongdoing or guilt. The preliminary ERISA class-action settlement will distribute portions of the $17 million to respective class members’ 401(k) plans. The final settlement must be approved by a federal judge in New York District Court before workers will receive a penny in compensation.
The nature of the class-action ERISA case fully illustrates the many potential threats to worker’s individual retirement accounts. When those who are responsible for protecting an individual account either knowingly or unwittingly enable poor investments and improper use of funds, the financial toll can rise to a very significant amount.
Workers at Neuberger Berman Group are fortunate to recoup their losses due to potential ERISA violations. The matter fully illustrates the value of an experienced ERISA attorney. Without one, those who are supposed to uphold fiduciary duties and financial responsibilities to workers and others might get away with criminal behavior. An ERISA attorney may help hold accountable those who have made honest mistakes or even dishonest ones.