This is part two of my conversation with Jerry Schichter, to be clear that means there was a part one which was last week. I would strongly suggest you listen to that one first to gain some perspective on Jerry and the retirement plan litigation he has been responsible for.
That said, in this episode we pick up right where we left off last time and finish off the conversation around whether Jerry feels some of the strategies employers and plan fiduciaries use to determine the reasonableness of plan fees are effective. Then we wade into some waters were Jerry uses some pretty clear and strong language to describe a few practices he sees in the market. Right or wrong, his comments will keep you on the edge of your seat. I also give Jerry a chance to address some of his critics, tell us whether he plans to ride off into the sunset in the near future and share a key concept in closing that should provide some comfort to employers. I hope you enjoyed part one, I think this one is even better.
Jerry Schlichter, Founding and Managing Partner of Schlichter, Bogard & Denton, pioneered Employee Retirement Income Security Act (ERISA) excessive fee litigation and has represented employees and retirees in 20 401(k) excessive fee cases.
In recent rankings of the most influential people in the 401(k) industry by 401kwire.com, Schlichter has repeatedly ranked in the top 5. This is in recognition of his accomplishments with numerous nationwide class actions brought on behalf of employees and retirees in large, corporate 401(k) plans, alleging excessive fees and conflicts of interest that reduce employees’ and retirees’ retirement assets.
In 2006, after a year and nine months of investigation into the industry, he and his firm filed his first in a series of cases on behalf of employees and retirees. At that time, no case had ever been brought alleging excessive fees in a 401(k) plan, despite the 401(k) having become America’s de facto retirement system, and there being over 500,000 plans in America. In addition, the Department of Labor had never brought a case for excessive fees in a 401(k) plan.
Since that time his firm has reached precedent setting settlements in over a dozen cases, on behalf of 401(k) plan employees and retirees representing over 1.5 million workers and retirees. These settlements have not only included monetary recoveries for the workers and retirees, but each has also included provisions going forward to reform the plans and to ensure that fees will be reasonable in the future.
Schlichter and his firm have been referred to by federal judges as “preeminent “in the field of 401(k) fee litigation; as demonstrating “extraordinary skill and determination”; as making “a significant, national contribution,” having “educated plan administrators, the Department of Labor, <and> the courts” about fees and fiduciary obligations; and he has been referred to by federal judges as a “private attorney general,” causing fees to come down in the entire 401(k) industry.
He has also been referred to as the “Lone Ranger” of 401(k) plans in the NY Times, and the term “Schlichterized” has been used to describe being sued by his firm.
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