PLANADVISER - January/February 2019 - 13

beneficiaries,
defendants
failed
to
adequately evaluate and monitor the
plans' expenses and caused the plans
to pay unreasonable and excessive fees.
The plaintiffs also claimed defendants
failed to negotiate a " separate, reasonable
and fixed fee for recordkeeping
with a single administrative provider
to the plans. " Instead, they said, the
defendants
" continuously
three different
retained
service providers-
TIAA, Vanguard and Fidelity. " The
court disagreed, writing, " plaintiffs'
allegations challenge the fundamental
structures of the Georgetown plans, not
the fiduciary attentions or prudence of
its trustees, " and plaintiffs provided no
evidence that the three recordkeepers
would have consolidated their services
or lowered their fees.
Details of Duke's Settlement
A case accusing Duke [University]
Faculty and Staff Retirement Plan's
fiduciaries of causing the plan to pay
unreasonable and greatly excessive
fees for recordkeeping, administrative,
and investment services, and a
second complaint-this one focusing
on revenue sharing the plan took but
did not deliver for distribution to plan
participants-have been combined for
a settlement agreement.
The
agreement was
announced
by counsel for both parties this past
December, but the details had yet to
be reported to the U.S. District Court
for the Middle District of North Carolina.
Now recently filed, however, the
agreement calls for a gross monetary
payment of $10.65 million to a settlement
fund for the plaintiffs.
The agreement also lists nonmonetary
actions to be taken by Duke.
The school agreed,
for a three-year
period, to hire an independent consultant
regarding bids for recordkeeping
services; to ease the ability of participants
to transfer their investments out
of frozen annuity accounts; to analyze
the cost of different share classes of
mutual funds considered for inclusion
in the plan; and to avoid using
plan assets to pay salaries of Duke
employees who work on the plan.
Duke University denies all allegations
of wrongdoing and denies all
liability for the allegations and claims
made in the lawsuits.
'Compensation' Definition
At Heart of ConAgra Lawsuit
A participant
in ConAgra
ways in which plaintiffs claim defendants
breached their fiduciary duties.
" Under the federal rules, " he wrote,
Brands'
retirement plan has filed an Employee
Retirement Income Security Act
(ERISA) lawsuit against the company,
alleging the firm is failing to adhere to
the definitions of " compensation " and
" permissible contribution " stated in its
plan documents.
The proposed class action was
filed in the U.S. District Court for the
District of Illinois. According to the
text of the complaint, defendants had
denied the plaintiff and a similarly
situated class of participants certain
retirement benefits to which they are
entitled and had based that denial on
a " reinterpretation " of plan documents
that violates the plan's clear language.
The text of the suit also challenges
the way defendants " have interpreted
and applied the plan for years, "
arguing that they violated ERISA duties
by reinterpreting plan language in a
conflicted manner aimed at reducing
employer costs.
" Defendants' purported reinterpretation
of the plan was motivated by their
desire to save money, " the complaint
states. " However, by wrongfully denying
millions of dollars in benefits to a large
number of plan participants and their
beneficiaries, defendants have violated
their fiduciary and other legal duties. "
Court Refuses to Dismiss
Mutual of Omaha Suit
A federal district court has denied
Mutual of Omaha's motion to summarily
dismiss a lawsuit accusing the fiduciaries
of its 401(k) plan of violating their
duties by selecting numerous investment
options not to benefit the plan or
employees, but because they paid fees
to Mutual of Omaha or its subsidiaries.
Citing a series of precedent-setting
cases, Senior U.S. District Judge Joseph
F. Bataillon of the U.S. District Court
for the District of Nebraska explained
in his opinion that an Employee
Retirement
Income
Security
Act
(ERISA) complaint of this nature need
not describe in exhaustive detail the
" a complaint must contain a short and
plain statement of the claim, showing
that the pleader is entitled to relief.
Specific facts are not necessary; the
statement need only give the defendant
fair notice of what the claim is
and the grounds upon which it rests. "
On the other hand, the judge
explained, for a claim to survive a
motion to dismiss under federal rules,
the plaintiff's obligation to provide the
grounds for his entitlement to relief
necessitates that the complaint contain
" more than labels and conclusions, and
a formulaic recitation of the elements
of a cause of action will not do. "
In this instance, the court found,
" the facts as alleged by plaintiffs [do]
constitute a plausible claim of misconduct
in the form of a breach of fiduciary
duty and loyalty ... [and] will deny the
motion to dismiss the claims. "
Transamerica Faces
Familiar Allegations
Participants in Transamerica's own
retirement plan have sued the company
under the Employee Retirement Income
Security Act (ERSIA), alleging that the
plan has favored investment products
managed by a Transamerica affiliate,
to the detriment of plan performance.
Parent company Aegon previously
settled similar class-action litigation
filed in early 2015. The new complaint,
filed in the U.S. District Court for the
Northern District of Iowa, Eastern Division,
echoes the 2015 lawsuit, but there
are some differences.
Specifically, Transamerica is accused
of " imprudently retaining " the
following
portfolios:
Transamerica
International Equity Portfolio, Transamerica
Small Core Portfolio, Transamerica
Large Value Portfolio, Transamerica
Large Growth Portfolio, Transamerica
High Yield Bond Portfolio and
Transamerica Mid Value Portfolio.
In a statement, Transamerica
denied the allegations, saying it offers a
range of nonproprietary funds as well,
complies with all applicable regulatory
and statutory requirements, and " will
vigorously oppose the case. " -PA
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PLANADVISER - January/February 2019

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