Summary of the Lawsuit
A federal class action lawsuit concerning T. Rowe Price’s 401(k) Plan, known as the T. Rowe Price U.S. Retirement Program, was filed February 14, 2017. It is brought on behalf of current and former T. Rowe Price employees who have, or had, 401(k) accounts (their retirement savings) in the company’s Plan. The lawsuit alleges that T. Rowe Price violated federal law and reaped millions of dollars in illicit fees by offering only T. Rowe Price’s own in-house investment funds in the 401(k) Plan, failing to offer the lowest cost versions of those funds, and failing to even consider any funds from other companies that offered lower fees and better performance.
Under the Employee Retirement Income Security Act of 1974 (“ERISA”), the federal law that sets minimum standards for retirement plans, including T. Rowe Price’s 401(k) Plan, companies are required to act as trustees and solely in the interest of the Plan’s participants when making decisions with respect to the investment of their employees’ retirement savings in company benefit plans. The lawsuit alleges, among other ERISA-violating conduct (see “Summary of the Claims,” below), that T. Rowe Price did not, as required by law, select or retain the 401(k) Plan investments that were in the best interests of participants, but instead, simply chose and retained the investments that most benefited T. Rowe Price’s bottom-line.
The lawsuit says that T. Rowe Price earned windfall profits at the expense of its employees, who paid, and continue to pay, millions of dollars of their retirement savings in the form of excess fees, and have suffered losses of tens of millions of dollars due to investment underperformance. The litigation seeks to compensate T. Rowe Price employees who participated in the 401(k) Plan.
The case name is: Feinberg v. T. Rowe Price Group Inc. et al, Case No. 1:17-cv-00427, U.S. District Court, District of Maryland.
Whom to Contact for More Information
In a class action case, one or more individuals— called class representatives—file a lawsuit on behalf of themselves and other similarly situated individuals who have similar legal claims. This procedure permits the claims of a large number of people to proceed in one lawsuit and ensures that all similarly situated persons are treated consistently.
If you are or were a participant in the T. Rowe Price 401(k) Plan at any time from February 14, 2011 through the present, you may be affected by this lawsuit. If you are interested in learning more about this lawsuit, including the possibility of serving as a class representative, or if you have information that might assist us in the prosecution of these claims, please contact Ciara O'Neill, Paralegal (firstname.lastname@example.org) or by mail or telephone:
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Fifth Floor
Washington, D.C. 20005
Telephone: 888-240-0775 (Toll Free) or 202-408-4600
Summary of the Claims
The lawsuit alleges that T. Rowe Price and its affiliates have violated numerous provisions of ERISA by, among other things:
- Imprudent and disloyal selection and monitoring of 401(k) Plan investments by giving preferential treatment to the in-house funds in order to generate millions of dollars in fee income for the company at the expense of the retirement savings of employees;
- Failing to offer the lowest cost version of certain in-house funds to 401(k) Plan participants (T. Rowe Price employees);
- Failing to remove and prudently monitor the performance of 401(k) Plan Trustees, who were breaching their duties of loyalty and prudence by exclusively offering in-house funds in the 401(k) Plan, and failing to consider lower cost and better performing non-proprietary alternatives;
- T. Rowe Price affiliates breached their ERISA fiduciary duties to provide prudent and un-conflicted investment advice to the Plan Trustees that was in the best interest of the 401(k) Plan participants, and not for the benefit of T. Rowe Price's own investment management business; and
- Committing transactions specifically prohibited by ERISA by causing the 401(k) Plan to engage in transactions that the company and its affiliates knew or should have known constituted sales or exchanges of property between the 401(k) Plan and parties in interest, furnishing of services between the Plan and a party in interest, transfer of Plan assets to a party in interest, and transactions between a Plan and its fiduciaries.
This lawsuit is brought as a class action on behalf of all participants and beneficiaries of the T. Rowe Price U.S. Retirement Program [the 401(k) Plan] from February 14, 2011 through the date of judgment.
Plaintiff has not yet filed a motion for class certification.
Status of the Litigation
Plaintiff filed the Complaint in the United States District Court for the District of Maryland (Baltimore) on February 14, 2017. The company answered the Complaint by filing a Motion to Dismiss all claims. On August 20, 2018, the Court denied the Motion to Dismiss as to all claims, meaning that all claims will now proceed into discovery.
COHEN MILSTEIN SELLERS & TOLL PLLC
Scott M. Lempert
1100 New York Avenue, N.W.
Suite 500, West Tower
Washington, D.C. 20005
Tel: (202) 408-4600
Fax: (202) 408-4699
MCTIGUE LAW LLP
J. Brian McTigue
James A. Moore
4530 Wisconsin Avenue, NW
Washington, DC 20016
Tel: (202) 364-6900
Fax: (202) 364-9960