Nordstrom Sued over Mismanagement of $34 Billion 401(k) Plan
Failure to Control Administrative Costs and Misuse of Forfeitures
A lawsuit has been filed against Nordstrom, Inc., alleging mismanagement of its $34 billion 401(k) plan. The suit claims that Nordstrom and its plan committee violated the Employee Retirement Income Security Act (ERISA) by:
Overpaying for Administrative Services
The suit alleges that Nordstrom paid excessive fees for administrative services, increasing costs for plan participants.
Misappropriating Forfeited Funds
The suit also claims that Nordstrom failed to use forfeited funds (money left behind by departing employees) to reduce plan expenses, instead using them for other purposes.
Breach of Fiduciary Duty
The suit alleges that Nordstrom and its plan committee failed to act in the best interests of plan participants, breaching their fiduciary duty.
Legal Implications
The lawsuit seeks damages for plan participants, as well as an injunction requiring Nordstrom to take corrective action. If successful, the suit could result in significant financial liability for Nordstrom and changes in the administration of its 401(k) plan.
Industry Impact
The lawsuit highlights the importance of responsible management of 401(k) plans, particularly in light of their growing significance in retirement planning. It also raises concerns about the potential for excessive fees and misappropriation of funds in large employer-sponsored retirement plans.
Sources
- CNBC: Nordstrom Sued Over Alleged Mismanagement of $34 Billion 401(k) Plan
- Bloomberg: Nordstrom Sued Over Alleged Mismanagement of 401(k) Plan
- Law360: Nordstrom Sued Over 401(k) Plan Fees
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