The Eighth Circuit May be Next to Rule on 401(k) Plan Fees

The Wal-Mart 401(k) plan is one of the largest plans in the U.S., with over 1 million participants and almost $10 billion in assets under the plan. The Eight Circuit will hear the issue of excessive fees after the case was quickly dismissed by the district court on a motion to dismiss. The appeal is focusing on the plans size in reviewing its ability to have negotiated the fees to the participants. The Wal-Mart 401(k) plan offers 10 mutual funds, a common/collective trust, Wal-Mart common stock, and a stable value fund. The opening brief sets forth that Merrill Lynch, the Plan's Trustee, had a revenue sharing arrangement with the mutual fund company it chose for the investment line up and, therefore, had "corrupted" the plan's fund selection process. The brief further argued that the mutual fund options were chosen based on the agreement to pay a kickback to the Trustee instead of choosing those options that would have better served the participants. The Department of Labor has filed an Amicus Brief urging the Eighth Circuit to reverse the District Court's dismissal.

(Braden v. Wal-Mart)