Accessibility Statement Skip Navigation
  • Why PRWeb
  • How It Works
  • Who Uses It
  • Pricing
  • Login
  • GDPR
  • Create a Free Account
Return to PRWeb homepage
  • News
  • Resources
  • Contact
When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases

      • All News Releases
      • Multimedia Gallery

      • All Multimedia
      • All Photos
      • All Videos
  • Business & Money
      • Auto & Transportation

      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • View All Auto & Transportation

      • Business Technology

      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • View All Business Technology

      • Entertain­ment & Media

      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • View All Entertain­ment & Media

      • Financial Services & Investing

      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • View All Financial Services & Investing

      • General Business

      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • View All General Business

  • Science & Tech
      • Consumer Technology

      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • View All Consumer Technology

      • Energy & Natural Resources

      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • View All Energy & Natural Resources

      • Environ­ment

      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • View All Entertain­ment & Media

      • Health

      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • View All Health

      • Sports

      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • View All Sports

      • Travel

      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • Advocacy Group Opinion
      • Animal Welfare
      • Congressional & Presidential Campaigns
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • U.S. State Policy
      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • View All People & Culture

  • Hamburger menu
  • Cision PRWeb provides efficient communication tools to continuously engage with target audiences across multiple online channels
  • Create a Free Account
    • ALL CONTACT INFO
    • Contact Us


      11AM ET Sunday – 8PM ET Friday

  • Send a Release
  • Sign up
  • Log in
  • Resources
  • RSS
  • GDPR
  • News in Focus
    • Browse All News
    • Multimedia Gallery
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Send a Release
  • Sign up
  • Log in
  • Resources
  • RSS
  • GDPR
  • Send a Release
  • Sign up
  • Log in
  • Resources
  • RSS
  • GDPR
  • Send a Release
  • Sign up
  • Log in
  • Resources
  • RSS
  • GDPR

New Euclid Specialty Whitepaper - Exposing Excessive Fee Litigation Against America's Defined Contribution Plans

Euclid's whitepaper highlights the problem of excessive fee lawsuits and presents a sensible framework to restore fairness to the fiduciary standard of care for defined contribution plans.


News provided by

Euclid Specialty Managers

Dec 02, 2020, 20:55 ET

Share this article

Share toX

Share this article

Share toX

Exposing Excessive Fee Litigation Against America's Defined Contribution Plans
Exposing Excessive Fee Litigation Against America's Defined Contribution Plans

VIENNA, Va., Dec. 2, 2020 /PRNewswire-PRWeb/ -- Euclid Specialty Managers, LLC ("Euclid Specialty") released a new whitepaper authored by the underwriting company's Managing Principal Daniel Aronowitz exploring the problems with recent surge in excessive fee litigation. Plaintiff law firms have flooded the federal courts with cookie-cutter ERISA class action litigation against defined contribution plans and the employees who agree to serve as fiduciaries for their company's retirement plans. The copy-cat lawsuits — now nearly 200 in number with over 90 filed in 2020 alone — attack retirement plan investment options that are commonplace and longstanding. These lawsuits allege that defined contribution plan administrative and investment fees are too high, and that any investment performance that lags any plaintiff-asserted benchmark — a moving target — is actionable negligence that should generate huge indemnity payments and high attorney fees to the firms bringing these lawsuits.

According to Euclid's whitepaper, excessive fee litigation involves allegations that a plan is paying too much to its investment manager and recordkeeper. Specifically, the lawsuits allege that some of the plans' investment options charged excessive fees or performed inadequately, and that the costs to administer the plan are too high. As Aronowitz explains, "Plaintiff firms are targeting defined contribution plans with a new purported standard of care that has not been officially endorsed by regulators. The lawsuits find a lower-cost mutual fund and assert that all investment fees higher than that purported benchmark constitute fiduciary negligence. Alternatively, the plaintiffs allege that a lower recordkeeper fee is available in the market, and that any higher amount that the plan charges participants is also part of a damages model from which the plaintiffs lawyers take a one-third cut. The bar to file a lawsuit with huge purported damage models is too low, and subjects all plan sponsors to the harassment of unfair and expensive litigation. The Department of Labor must step in to set a fair and uniform standard, and, in the meantime, federal courts must apply a more rigorous standard to weed out the frivolous litigation."        

As Aronowitz explains, “Plaintiff firms are targeting defined contribution plans with a new purported standard of care that has not been officially endorsed by regulators.

Post this

When an excessive fee lawsuit survives a motion to dismiss, plaintiff firms are able to drive huge settlements – often between $10M and $30M – because the cost of litigation is high and the damage models of alleged investment under-performance or excessive plan fees being allowed by federal courts are huge. The problem for U.S. plan sponsors is that it is now difficult to secure adequate fiduciary liability insurance given the surge in excessive fee lawsuits, with over ninety class actions filed just this year alone. Fiduciary liability insurers have responded by limiting their exposure to this capricious liability by reducing limits, raising premiums, dramatically raising policy retentions, and sometimes capping — or sublimiting — the amount of excessive fee or class action exposure. While most plans focus on premium increase, the key change in the fiduciary market is the increased level of policyholder retentions.

The Whitepaper suggests four systemic reforms needed to restore a fair and uniform fiduciary standard of care:

  • Reform # 1 - The Need for a Uniform and Rational Standard of Care from Federal Regulators.
  • Reform #2 - Federal courts must apply a uniform, rigorous standard in ruling on a motion to dismiss in excessive fee cases.
  • Reform #3 - Federal courts must apply a damages cap and limit attorney fees to reduce the outsized damages.
  • Reform #4 - Recordkeepers and investment providers to America's DC plans must take responsibility and bear the burden of allegations of excessive fees.

Finally, the Whitepaper suggests that every defined contribution plan is now at risk and must change how it is doing business. If you want to offer a retirement plan, you must engage in risk management to reduce plan recordkeeping and investment fees and offers advice on how to do so.

To learn more, download the Whitepaper Exposing Excessive Fee Litigation Against America's Defined Contribution Plans or visit our website at http://www.euclidspecialty.com.

Media Contact

John O'Brien, Euclid Specialty Managers, +1 571-730-4810, [email protected]

SOURCE Euclid Specialty Managers

Modal title

Contact PRWeb

  • 11AM ET Sunday – 8PM ET Friday
  • Contact Us

About PRWeb

  • About PRWeb
  • Partners
  • Partnership Programs
  • Editorial Guidelines
  • Resources

Why PRWeb

  • Why PRWeb
  • How It Works
  • Who Uses It
  • Pricing

Accounts

  • Create a Free Account
  • Log in
  • Contact Us

Do not sell or share my personal information:

  • Submit via [email protected] 
  • Call Privacy toll-free: 877-297-8921

Contact Cision

Products

About

My Services
  • All News Releases
  • Online Member Center
  • ProfNet
Cision Distribution Helpline
888-776-0942
  • Legal
  • Site Map
  • RSS
  • Cookie Settings
Copyright © 2025 Cision US Inc.