Shed of Many Claims, MEP Excessive Fee Litigation Goes to Trial
NFP knocks back all claims against it, but some charges filed against the plan fiduciary defendants and flexPATH will now go to trial.
The Schlichter law firm is representing the plaintiffs here—and the litigation targets are NFP Retirement, Inc., flexPATH Strategies, LLC, Wood Group U.S. Holdings, Inc., Wood Group Management Services, Inc. (nka Wood Group USA, Inc.), and the Committee of the Wood 401(k) Plan with regard to practices (and alleged breach of fiduciary duties and prohibited transactions under ERISA) for the $2.4 billion, 18,000+ participant plan.
The plaintiffs here—former participants of the Wood 401(k) Plan—Robert Lauderdale, Joshua Carrell, Ting Sheng Wang, Leonard Dickhaut, Robert Crow, Aubin Ntela and Rodney Aaron Riggins—all represented by the law firm of Schlichter Bogard & Denton LLP—claimed that rather than acting in the exclusive best interest of participants, “the Wood Defendants and NFP caused the Plan to invest in NFP’s collective investment trusts managed by its affiliate flexPATH Strategies, which benefitted the NFP Defendants at the expense of Plan participants’ retirement savings. The Wood Defendants and NFP also failed to use their Plan’s bargaining power to obtain reasonable investment management fees, which caused unreasonable expenses to be charged to the Plan.”
At a high level, those aren’t unusual charges in this type of litigation. However, there were some new elements. Specifically, the suit (Lauderdale v. NFP Ret., Inc., C.D. Cal., No. 8:21-cv-00301, complaint 2/16/21) claims that, “Based on conflicted advice, Defendants added NFP’s affiliated collective investment trusts to the Plan that were managed by an untested investment manager (flexPATH Strategies), and that NFP acted “under a profound conflict of interest in recommending the use of its affiliated investments in the Plan.”