May 27, 2011 – A nationwide class action has been filed on behalf of potentially thousands of ERISA retirement plan participants who may have been overcharged fees in connection with the division of their retirement benefits during their divorce.
A nationwide class action has been filed on behalf of potentially thousands of ERISA retirement plan participants who may have been overcharged fees in connection with the division of their retirement benefits during their divorce.
NEW YORK, New York, May 27, 2011 – Class action attorneys at Levy Konigsberg LLP have filed a nationwide class action lawsuit alleging breach of fiduciary duty under the Employee Retirement Income Securities Act of 1974, as amended (“ERISA”) against FMR, LLC (“Fidelity”), the nation’s No. 1 provider of workplace retirement savings plans.
The action was brought on behalf of one named plaintiff and potentially thousands of other retirement plan participants that used Fidelity as their Qualified Domestic Relations Order (QDRO) Service Provider and may have been charged unreasonable and excessive fees in connection with Fidelity’s QDRO services. The complaint was filed in the United States District Court for the District of New Jersey on May 19, 2011.
The class action complaint alleges that Fidelity has stepped into the role of plan administrator and serves as the QDRO Service Provider for thousands of retirement plans. A QDRO is the operative instrument that divides a plan participant’s retirement benefits with his or her former spouse during a divorce or legal separation. In order for the division of a divorcing couple’s retirement plan benefits to be effective, the QDRO must meet certain specific requirements under ERISA and be deemed qualified by the plan administrator.
The complaint further alleges that Fidelity receives fees from retirement plans in connection with its QDRO review, qualification and administration services for such plans. The Department of Labor specifically limits the fees that a retirement plan’s QDRO administrator may charge for its services to the “reasonable expenses” incurred in connection with the administration of the QDRO. However, according to the complaint, Fidelity assesses an unreasonable and excessive fee of $1,200 to the individual defined contribution plan accounts of the plan participant and/or his or her former spouse, which the complaint alleges bears no relation to the services actually rendered by Fidelity or the expenses Fidelity incurred in rendering such services. The complaint also alleges that Fidelity has breached its fiduciary duty under ERISA and, as a result, thousands of retirement plan participants and beneficiaries have been denied the full value of their retirement benefits.
Class action lawyer Moshe Maimon, the plaintiffs’ attorney handling the case at Levy Konigsberg LLP estimates that, in addition to the named plaintiff, Nicholas Danza, there could be hundreds, if not thousands, of retirement plan participants and beneficiaries who fell victim of the defendant’s actions.
To identify and get in touch with potential class members in this class action, Levy Konigsberg LLP has designated a 24/7 hotline at 1-800-988-8005.