BG secured an important win for employee participants of the Vituity and MedAmerica 401(k) retirement plan. On Friday, U.S. District Court Judge Richard Seeborg of the Northern District of California ruled on a motion to dismiss filed by CEP America and the MedAmerica Retirement & Benefits Committee, which oversees the 401(k) plan offered to employees and retirees of Vituity and MedAmerica. In his ruling denying the motion in part, Judge Seeborg noted that the Complaint alleges that the fees charged by recordkeepers to other 401(k) plans “were multiples less than those charged” by Schwab.
The employees, represented by Greg Porter, BG’s ERISA Practice Group Leader, and ERISA partner Mark Boyko, allege that the Defendants violated ERISA laws by allowing millions of dollars of their retirement savings to go to Schwab’s recordkeeping arm and to MedAmerica. The Plaintiffs also alleged that Schwab’s excessive compensation included Schwab receiving benefits from the 401(k) Plan’s use of Schwab’s bank savings account.
“Employers need to understand and accept their responsibility for prudently managing 401(k) plans free from conflicts of interest and self-dealing,” Boyko said. “We look forward to pursuing this matter on its merits.”
The case is Nagy, et al., v. CEP America, LLC, et al, No. 23-cv-5648, and is pending in the Northern District of California.
BG’s award-winning ERISA, Employee Benefits & Trust Litigation practice has been ranked by Chambers & Partners in the Nationwide ERISA Litigation: Mainly Plaintiffs category. Learn more about our ERISA services here.
Greg Porter, BG’s ERISA Practice Group Leader, has also received top rankings by Chambers in Nationwide ERISA Litigation: Mainly Plaintiffs (Band One). Learn more about his practice here.
And for more on ERISA partner Mark Boyko, visit here.
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