Retirement Plan Lawsuits
Class Action 401(k) Lawsuit
Your employer may be in violation of the new law for retirement plans. Employers that have retirement plans must offer the best options available to their employees. If you are an employee with a 401(k), you may be losing money. Please contact us using the form on this page or by calling us at 424-245-5505. You may be part of a class action.
- Do you think your retirement plan is too expensive?
- Are you unsure whether your retirement plan is too expensive?
- Do you have other questions about your existing retirement plan?
If the answer to any of these questions is Yes, then please contact The Class Action News.
The new rule requires employers to make sure employees have the best retirement plan options available. There may be thousands of retirement plans that are in violation of the law. Many people are stuck in an expensive retirement plan even though there are cheaper plans available. Employees are losing money because employers are not informing them of cheaper alternatives.
What is a 401(k)?
A 401(k) is a retirement savings plan that is sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Employees can control how their money is invested so long as they are aware of their options. Employers usually hire a manager to handle the investments, but the manager may not be giving you all the information you need.
401(k) plans are becoming more common. According to the Investment Company Institute, 53 million people held about $4.5 trillion in 401(k) accounts as of September 30.
The Law
ERISA, or the Employee Retirement Income Security Act, is a federal law that sets rules for retirement plans in the private industry and rules related to tax and employee benefit plans. If an employer provides retirement plans for its employees, then the employer must follow the laws in ERISA.
How This Affects Me
In a recent lawsuit, the court decided that employers have to review retirement plan investments more often. Employers that provide retirement plans to their employees now have to follow a stricter law. Thanks to the new ruling, employers must take greater care with your investment and inform you of cheaper investment options.
The new rule requires employers to make sure employees have the best retirement plan options available. Employers must inform you of the cheaper investment alternatives, so you can decide how to spend your money.
If you are an employee with a retirement plan, please contact us using the form on this page or by calling us at 424-245-5505.
Retirement Plan Lawsuits
In a recent Supreme Court case the court ruled that employers providing retirement plans for their employees must now monitor the investments continuously. If you are an employee with a 401(k) and your employer is not regularly checking your investments, please contact us using the form on this page or by calling us at 424-245-5505. You may be part of a class action.
The Problem
Navigating your options for retirement can be confusing and the choices you make for your retirement plan will affect you for years to come. People are increasingly turning to other sources of income to supplement social security payments. Options like mutual funds, exchange-traded funds, and 401(k) are all good choices. Out of these three, the average person may be most familiar with the 401(k) because it is offered through employers. However, the 401(k) industry lags behind the growth of cheaper mutual funds and ETF options. This was mostly due to 401(k) fees adding up and eventually being cost prohibitive. According to Mitch Tuchman, the managing director of Rebalance IRA, 401(k) fees can eat up nearly 30% of your retirement savings over 10 years, even a seemingly small annual fee such as 1.27%. The truth of the matter is that the employers that sponsor retirement plans benefit from keeping their employees ignorant of their investment options.
Now, with the recent Supreme Court decision, using a 401(k) will be more favorable for retirement planners.
Common Methods of Investing for Retirement
A mutual fund is a method of investing where many investors pool their money to purchase stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers who invest the capital to produce income for the fund’s investors. Mutual funds are good for small investors because it allows them access to professionally managed and diversified investments.
An exchange-traded fund, or ETF, is an investment fund that is traded like stock on a stock exchange. The investment assets (stocks, bonds, gold bars, foreign currency, etc.) are divided into shares and split among the shareholders. Prices of ETF shares fluctuate throughout the day much like stocks. However, only ‘authorized participants’ may buy and sell ETF shares. Authorized participants are large broker-dealers that have entered into agreements with the ETF’s distributor. The main advantage of an ETF is that provide the easy diversification, low expense ratios, and tax efficiency of index funds. ETFs also have some of the buying and selling options of stocks.
A 401(k) is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. It lets the employee control how his or her money is invested. Employers usually hire an administrator to handle the investments. The administrator then puts the employee’s money into stocks and bonds.
Changes to Retirement Planning
After the recent Supreme Court case, 401(k) plan sponsors now must continuously monitor the investment options they offer participants. Nancy Ross, a partner in the Employment and ERISA Litigation practice at Mayer Brown, says that ongoing reviews of investments were already the trend. But now, there is case law to set an official standard for oversight in retirement plans.
If you are an employee with a retirement plan please contact us using the form on this page or by calling us at 424-245-5505. Your employer may not have upgraded their investment monitoring procedures, and may be in violation of federal law.