A new 401(k) class-action lawsuit alleging a fiduciary breach in part for excessive Vanguard Group fund fees could, ironically, support the position of actively managed investment funds in retirement plans. “This case, whether it sticks or not, bodes well for active management,” said Jason Roberts, chief executive of the Pension Resource Institute. The 401(k) industry over the last several years has seen fees for plan investments pushing lower, helped along by fee-disclosure regulation the Labor Department handed down in 2012 and a barrage of 401(k) litigation centered on
A class action suit filed in the US on 29 December 2015 could support the case for active fund management. The case against Anthem Inc, a US healthcare company founded in the 1940’s, criticises fiduciaries of the Anthem 401(k) plan for choosing several funds offered by Vanguard, a pioneer of low-cost funds. Fiduciaries may have been swayed by a series of lawsuits the 401(k) industry has faced over the last several years, which have focused on excessive investment management and record keeping fees, and this case may see them reviewing the way they fulfil their obligations. Jason Roberts, CEO of the Pensions Resource Institute said the case bodes well for active management, whether it sticks or not, as it raises the importance of value rather than simply looking at fees in a vacuum.