Excessive fee claims under the Employee Retirement Income Security Act (ERISA) have become a common legal battle. Employees nationwide face hurdles when challenging fees tied to their retirement plans.
Understanding these challenges can help employees protect their financial future.
Proving fiduciary breaches
ERISA requires fiduciaries to act in the best interests of plan participants. When there are excessive fees, employees must prove that the fiduciaries failed to monitor plan expenses or chose costly investments without considering cheaper alternatives. Gathering the evidence needed to demonstrate negligence or imprudence can be time-intensive and complex.
Understanding fee structures
Many employees struggle to understand the intricate fee structures associated with retirement plans. Fees often include administrative costs, investment management charges, and recordkeeping fees. Without clear disclosures or knowledge of market standards, proving that fees are excessive becomes more difficult. Employers and fiduciaries may argue that fees reflect necessary services, adding another layer of complexity to litigation.
Navigating class certification
Many excessive fee claims are pursued as class actions. For a class to be certified, employees must show that the issues affect all participants in the plan, not just individual cases. Meeting this legal standard can be challenging and may prolong litigation.
Time limitations
ERISA lawsuits are subject to strict deadlines. Employees must file claims within six years of the alleged breach or three years after discovering the issue. Missing these deadlines can prevent employees from pursuing their cases, even if evidence of excessive fees exists.
Protecting employee rights
Challenging excessive fees under ERISA is a complicated process that requires substantial evidence and an understanding of legal procedures. Staying informed about fees and plan details can help employees take action when necessary and hold fiduciaries accountable for their responsibilities.