Revenue Sharing 401(k) Claim Dismissed
A federal court in Wisconsin held that an employer, trustee for the employer's 401(k) plans, and the investment advisor of the 401(k) funds cannot be liable under ERISA for failing to dislose that the investment advisor shared some of the fees it received with the trustee of the 401(k) plan. Hecker v. Deere & Co., 2007 WL 1874367 (W. D. Wis. June 21, 2007).
The trustee in the case was Fidelity Trust and the investment advisor was one of its corporate siblings, Fidelity Research.
The court held that (1) ERISA's disclosure provisions don't require disclosure of revenue sharing and (2) it is not a breach of an ERISA fiduciary duty to fail to disclose revenue sharing arrangements.
