THE WHAT? A judge at the U. S. District Court of the Southern District of New York has ruled that an excessive fee lawsuit against Estée Lauder is to continue, according to a report by Plansponsor.
THE DETAILS Judge Jesse Furman has denied Estée Lauder’s motion to dismiss the suit, which accused the company, its board of directors and retirement plan’s investment committee of breaching their fiduciary duties under the Employee Retirement Income Security Act (ERISA).
It stated that the group failed to prevent the plan from lowering investment and recordkeeping fees.
According to the suit, the defendants failed to review the plan’s investment portfolio with due care to assess for prudent investment options in terms of cost.
It also accused private label collective investment trust (CIT) target-date funds (TDFs) of charging ‘grossly excessive fees’ between 2014 and 2018. Other grievances include failing to track record keeping expenses and not issuing any requests for proposal to benchmark the recordkeeping fees.
THE WHY? While Furman did not give a reason for his dismissal, he stated that the court would explain why at an initial pre-trial conference next month.
Furman allowed both parties to redact narrow references to recordkeeping fees from their memoranda of law.