Texas businesses that offer benefits that are governed by ERISA understand that they must comply with the law or face lawsuits. Recently, an ERISA lawsuit that was filed by employees of Deutsche Bank against the company was partly dismissed.
Class action status was granted in September 2017 after the lawsuit was initially filed in December 2015. The employees alleged that Deutsche Bank included high-cost investment products in its 401(k) in order to benefit the bank. Deutsche Bank offered its employees 22 different funds from which they could choose, and it owned 10 of the funds.
The employees allege that the bank engaged in self-dealing by including its proprietary funds in its matched savings plan. The plaintiffs allege that the bank made millions of dollars in management fees by including its own plans. Deutsche Bank filed a motion for summary judgment, which the court granted in part. The court denied the motion because the plaintiffs could not establish causation of losses. However, the court granted the summary judgment motion on the plaintiffs' prohibited transactions claims.
Businesses are able to attract and retain employees by providing them with benefits. However, if benefits are offered to employees, the companies will need to make certain that they comply with the mandates of ERISA. If companies do not comply with ERISA, they may become embroiled in business litigation. Business owners might want to get help from experienced commercial law attorneys who might be able to help them understand the ERISA law and the rules that apply to companies that offer covered benefits to their employees.
Source: Plan Sponsor, "Deutsche Bank self-dealing ERISA suit partly dismissed," John Manganaro, June 11, 2018