4/24/12 10:55 PMDOL joins in 401(k) fees case - Pensions & InvestmentsPage 1 of 5http://www.pionline.com/article/20080331/PRINTSUB/451877207
Chris Kleponis/Bloomberg News
Edward A.H. Siedle says theDOL’s brief gives added weightto the appeal.
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DOL joins in 401(k) fees case
gency’s brief asks court to reinstate class-action suit against Deere, Fidelity
WASHINGTON — The Labor Department wants an appeals court to reversea decision dismissing the 401(k) fee class-action lawsuit againstDeere & Co.andFidelity Investments.The Labor Department’s request,filed in a brief, gives a strong boostto the appeal by attorneys forparticipants in the $2.5 billionDeere 401(k) plan.In June, a U.S. District Court judgein Madison, Wis., dismissed thesuit against Deere, Moline, Ill., andFidelity Investments , Boston, trustee and record keeper for the Deere plan.Judge John C. Shabaz had said the Employee Retirement Income Security Act does not require plansponsors or service pro¬viders to disclose revenue-sharing information to 401(k) plan participants. Thesuit alleged that plan executives failed to disclose these fees to participants, as required by ERISA.(Revenue sharing is the common practice of mutual funds and their investment managers makingpayments to other service providers.)Jerome Schlichter, founding partner of Schlichter, Bogard & Denton, St. Louis, the law firmrepresenting Deere participants, appealed the case; it is pending in the 7th U.S. Circuit Court of Appealsin Madison. The Labor Department’s brief has breathed new life into the fight.The brief carries a lot of weight in the appeal, said Michael Roche, a partner at Winston & Strawn LLP,Chicago. “The plaintiffs are happy that the DOL weighed in. Having a brief filed on their behalf helpstheir cause,” said Mr. Roche.Edward A.H. Siedle, president, Benchmark Financial Services Inc., Ocean Ridge, Fla., said the brief speaks volumes and puts the appeals case back on track.“The defense bar (attorneys for Deere and Fidelity) and industry commentators have consistently takenthe view that these (fee) cases are meritless, and I know that a lot of questionable fiduciary practices aresurfacing through these lawsuits. It’s encouraging that the DOL is weighing in here and it should tell