Kim Jones Discusses 401(k) Litigation With PLANADVISER

In “401(k) World: The Litigators,” benefits and executive compensation partner Kim Jones spoke to PLANADVISER about the present and future states of 401(k) litigation.

Jones does not believe lawsuits have significantly changed retirement industry practices operating under the Employee Retirement Income Security Act (ERISA), primarily because trial decisions, by and large, have supported fiduciary practices under ERISA. “At the end of the day, the processes haven’t changed,” she said. “When these 401(k) cases go to trial, they have been generally favorable for the plan fiduciaries.”

Many cases end up settling, Jones noted, in part because going to trial can be both time-consuming and expensive. “There is a business decision that is made,” she continued. “That’s a big concern from the defense bar’s stance because we’d love to see more cases be litigated on the merits.”

The publication further shared takeaways from a client alert on decisions from a judge in the Eastern District of Wisconsin. Despite the differing outcomes, Jones explained that excessive fee complaints are slowing down as earlier cases get dismissed.

Jones concluded that the firm is working on the next wave of cases — including more recent lawsuits regarding forfeiture cases — in which plaintiffs are arguing that plan sponsors should only be using forfeited funds to reduce fees for participants. She added that the firm is preparing for new employee benefit-related complaints to come in health care, which has come under increased regulation via the Consolidated Appropriations Act of 2021.