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Rating:Lockheed's 401k Case Starts Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, December 15, 2014

Lockheed's 401k Case Starts

Reported by Sean Hanna, Editor in Chief

Some critics have long argued against the use of retail mutual funds in 401(k) plans. The contention is that retail funds charge excessive fees compared to institutional products, harming savers and putting plan sponsors in violation of their fiduciary duties.

Whether the criticism will stand has been seen as something that is up to the courts.

This week the U.S. District Court for the Southern District of Illinois will start hearing arguments on a 401(k) suit that may shed some light on the validity of the critics arguments.

Abbott v. Lockheed does not specifically address the mutual fund issue. Rather, the fees in the stable value fund offered in the Lockheed plan are at issue. The case was first filed eight years ago.

The trial starts today.

The suit is one of Schlichter Bogard & Denton's lawsuits over allegedly excessive fees in jumbo 401(k) plans. A year ago the U.S. Supreme Court gave its blessing to the class-action designation of the lawsuit.

Jerry Schlichter, representing the plaintiffs in the case, was not immediately able to comment on the beginning of the trial.

Larisa Cioaca, a spokeswoman for giant defense contractor Lockheed Martin, sent 401kWire the following emailed statement:

Lockheed Martin's position has remained constant and we believe that all allegations of improper management of our 401(k) savings plans are false. We remain committed to defending against the allegations of stages of the litigation.

Lockheed's multiple defined contribution plans now hold some $31.9 billion in assets and claim more than 120,000 participants. Voya (formerly ING) is the plan recordkeeper. 

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