Thursday, July 7, 2022
Market-Reporter
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate
No Result
View All Result
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate
No Result
View All Result
Market-Reporter
No Result
View All Result
Home Retirement

Class Action Filed Against ARC’s Retirement Plan Management

MtR by MtR
June 24, 2021
in Retirement
0


Participants in the American Red Cross (ARC) retirement plan have gone to federal court alleging retirement fund fees were not kept below market standards and that returns on investments were subpar. Fund participants claim that they lost millions of dollars, according to a class action complaint filed in the U.S. District Court for the District of Columbia. 

On an individual basis, the average participant’s losses due to the plan’s high costs would run to $45,000, it is alleged in the complaint.

“We don’t believe there is any validity to the claims that the American Red Cross 401(k) plan has been mismanaged,” American Red Cross National Headquarters Vice President, Communications Elizabeth Penniman wrote to The NonProfit Times via an email. “To the contrary, we believe that the Red Cross 401(k) plan has been well managed and provides a valuable benefit to our employees. We do not believe any litigation against our plan would have any merit. Plaintiff law firms have been very active in soliciting participants in company 401(k) plans to pursue litigation against plans and employers, and this is part of an uptick in litigation in this area. Many of these lawsuits are without merit.”

According to the complaint, the American Red Cross Savings Plan had a minimum of $894 million under management during the class period, March 2, 2015 through the date of judgment. At the end of 2018 the plan had more than $1 billion in assets under management, which had increased to $1.2 billion by the end of 2019, the complaint alleges.

It is unclear how much of the increase was due to employee and employer contributions during the year. According to the complaint, employees may contribute between 1% and 50% of their annual contribution on a pretax basis to the plan, with the ARC matching contributions up to 4% of the employee’s compensation. The plan had no fewer than 22,000 participants at any point during the class period.

A plan of that size would be considered a “jumbo plan,” according to the complaint, which would give fiduciaries significant leverage regarding fees and expenses levied against it. The plaintiffs allege the defendants, including the ARC, its board of governors, its benefit administration committee and various John Does, neither attempted to reduce plan expenses nor scrutinized investment opportunities to ensure they were prudent.

The plaintiffs also claim costs for the Red Cross plan were among the highest for plans with assets of more than $500 million, and that these costs increased in 2016 after the defendants changed administrative service providers, despite fees traditionally decreasing as economies of scale, vendor competition and negotiation leverage factors come into play. They further allege resources were steered into higher-cost branded investment properties.

The plaintiffs acknowledge they do not have specific knowledge of the defendants’ decision-making process regarding the plan because that information is in the possession of the defendants and has not yet been subject to discovery.

The plaintiffs are seeking restoration of what they consider to be the high administrative fees as well as unrealized profits they believe they have lost. 

Diana F. Tracy, David E. Bagenstose, Jason L. Richard and Stacy M. Moxley lead the plaintiff class. The plaintiffs are represented by Christopher Martini Battista of the Law Office of Christopher M. Battista, Fairfax, Va.; Mark K. Gyandoh and Gabrielle Kelerchian of Capozzi Adler PC, Merion Station, Pa.; Donald Reavey of Capozzi Adler PC, Harrisburg, Pa.; Jon Lambiras and Todd S. Collins of Berger Montague PC, Philadelphia; Daniel J. Walker, of Berger Montague, Washington, DC and Eric Lechtzin, of Edelson Lechtzin LLP, Newtown, Pa.

The defendants are represented by Michael Joseph Prame and William James Delaney of Groom Law Group, Washington, DC.

The case is Tracy et al v. American National Red Cross et al, case number 1:21-cv-00541-EGS.



Source link

Related articles

Roanoke Valley SPCA holds retirement “pawty”

July 7, 2022

5 Activities For The Golden Years Of Retirement

July 6, 2022

Related Posts

Roanoke Valley SPCA holds retirement “pawty”

by MtR
July 7, 2022
0

ROANOKE, Va. (WDBJ) - The Roanoke Valley SPCA honored a long-time staffer with a retirement “pawty” Wednesday afternoon.The guest of...

5 Activities For The Golden Years Of Retirement

by MtR
July 6, 2022
0

Active Aging Presented by Public Health Seattle-King County You have decided to retire! Congratulations! You may be thinking, “Now what?”...

Biden heading to Ohio to tout work on bolstering retirement savings

by MtR
July 6, 2022
0

Launched last month, the “Socialists for Pritzker” account quickly amassed over 10,000 followers, for wisdom like “what if we got...

Why Claiming Social Security at Full Retirement Age Could Be the Safest Option for You

by MtR
July 6, 2022
0

There's a good chance you'll depend pretty heavily on Social Security once you retire. Even if you manage to bring...

Secure retirement out of reach for many Caymanians

by MtR
July 6, 2022
0

Charities like Meals on Wheels help pensioners who do not have enough money to survive in Cayman.The vast majority of...

Load More
  • Trending
  • Comments
  • Latest

Bank of England tells ministers to intervene on digital currency ‘programming’

June 21, 2021

Tips for checking smoke alarms during daylight saving time

March 12, 2022

GLOBAL MARKETS-U.S. stocks follow Europe up; Treasury yields rise, dollar firm

July 9, 2021
Fed tapering and emerging markets

Fed tapering and emerging markets

June 7, 2021
African currencies week ahead: Zambia's kwacha seen on back foot, Kenyan shilling up – Business Recorder

African currencies week ahead: Zambia's kwacha seen on back foot, Kenyan shilling up – Business Recorder

0
Maxum Foods releases Global Dairy Commodity Update for June

Maxum Foods releases Global Dairy Commodity Update for June

0
Letter: Perpetual bonds can help states fight hunger

Letter: Perpetual bonds can help states fight hunger

0
United Kingdom ETFs Are Riding the Re-Opening Momentum

United Kingdom ETFs Are Riding the Re-Opening Momentum

0

Stocks in the doldrums as euro founders on recession fears

July 7, 2022

FMA Proposes Guidance for Advising on IPOs, Listed Equity

July 7, 2022

Defendants Secure Motion to Dismiss Victories in Three Post-Hughes Decisions | Proskauer – Employee Benefits & Executive Compensation Blog

July 7, 2022

Some Could Turn to Tech-Heavy Growth ETFs in a Recession

July 7, 2022

Recent News

Stocks in the doldrums as euro founders on recession fears

July 7, 2022

FMA Proposes Guidance for Advising on IPOs, Listed Equity

July 7, 2022

Defendants Secure Motion to Dismiss Victories in Three Post-Hughes Decisions | Proskauer – Employee Benefits & Executive Compensation Blog

July 7, 2022

Categories

  • Asia
  • Bonds
  • Canada
  • Commodities
  • Cryptocurrencies
  • Currencies
  • Emerging Markets
  • ETFs
  • Europe & Middle East
  • IPOs
  • Latin America
  • Mutual Funds
  • Personal Finance
  • Real Estate
  • Retirement
  • Spending & Saving
  • Stocks
  • U.S. Markets
  • Privacy & Policy
  • About Us
  • Contact Us
  • Advertise with us

© 2021 Copyright Market-Reporter

No Result
View All Result
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate

© 2021 Copyright Market-Reporter