The Employee Retirement Income Security Act (ERISA) governs the conduct of private employers who sponsor 401(k) and other retirement plan accounts. Workers across America today depend on their company sponsored retirement plans to provide them with income after their retirement. How the employers of these workers choose retirement plan investment options plays a critical role in the retirement income of all their employees.
ERISA requires employers to act prudently, loyally, and with the highest regard for the interests of employees when it comes to selecting plan investment options and investing plan assets. When a 401(k) retirement plan allows participants to exercise control over the assets in their retirement account, ERISA also requires the employer to provide complete and accurate information as well as certain other disclosures to its retirement plan participants and to offer a broad range of diversified investment options. When employers fall short on their ERISA fiduciary duties, employees can seek to hold their employers accountable for plan losses caused by the employers' breach.
ERISA's fiduciary duties apply to all plan investment options. In recent years, however, company stock as a plan investment option has been closely scrutinized as a result of several high profile cases. With alarming frequency, employers have elected to invest millions, and in many cases, hundreds of millions of dollars of plan assets in their own company stock while at the same time engaging in highly risky and illegal business and accounting practices. These practices cause company stock to be an imprudent and highly inappropriate plan investment option, and often result in enormous plan losses. Keller Rohrback is a national leader in pursuing ERISA breach of fiduciary duty claims against employers for losses to plans caused by imprudent investment in company stock.
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