Yet another set of outside voices has formally weighed in on the 401(k) fee
lawsuit against Deere & Co.—this time in support of the Moline,
Illinois-based manufacturer.
The ERISA Industry Committee, the American Benefits Council and the National
Association of Manufacturers have filed a joint brief stating that the lawsuit
should be dismissed in appeals court, where the case currently resides.
“This case is ripe,” said Quentin Riegel, the vice president for litigation
and deputy general counsel for the National Association of Manufacturers, the
trade association that represents more than 11,000 companies in the U.S. “It’s
on appeal, so we feel that the time is right to voice our view and reaffirm that
this case should be dismissed.”
Last summer, a federal judge granted Deere’s motion to dismiss the case, in
which Deere workers alleged that fees in the company’s 401(k) plan were
excessive. The suit also named investment manager Fidelity as a defendant, and
alleged that both parties breached their fiduciary obligations by providing
mutual funds and 401(k) services to participants with unreasonable, and
undisclosed, costs attached.
The brief filed by the three employer advocates states that “bald assertions
that 401(k) plan fees are ‘too high’ or ‘unreasonable’ can be readily made about
any plan,” and references 15 similar 401(k) fee suits that have been filed
against large corporations since 2006. In the Deere case, the brief notes, “the
plaintiffs’ heavy reliance on boilerplate allegations and the absence of
specific allegations strongly suggest that these cases were initiated as fishing
expeditions.”
The brief also noted that “although at first blush the complaints might seem
likely to contain specific details … their rhetorical flourishes and boilerplate
passages merely camouflage the complaints’ utter lack of substance.”
A Deere spokesman was not immediately available to comment on the brief.
Fidelity spokeswoman Jenny Engle said the brief supports Fidelity’s position
that the district court’s dismissal was the correct ruling in the case.
Jerome Schlichter, the attorney from St. Louis law firm Schlichter Bogard
& Denton who is representing the Deere workers, as well as workers at
several other companies who are pursuing similar suits over 401(k) fees, could
not immediately offer comment on the contents of the brief.
This latest development comes roughly two months after the Department of
Labor elected to step in and file its own brief stating that the judge erred in
dismissing the Deere case, and requested that the appeals court reverse this
decision.
Filed by Mark Bruno of Financial Week, a sister publication of Workforce
Management. To comment, e-mail editors@workforce.com.