New York—A jury awarded more than $38 million to a group of retirement plan participants who claimed fiduciary breaches against Pentegra’s Multiple Employer Defined Contribution Plan. This rare jury trial under the Employee Retirement Income Security Act (ERISA) concluded with findings that the plan’s fiduciaries had engaged in improper fees.
The case, titled Khan et al. v. Board of Directors of Pentegra Defined Contribution Plan et al., was brought forward in the Southern District of New York in 2020. The plaintiffs—Imran Khan, Joan Bullock, and Pamela Joy Wood—argued on behalf of themselves and other plan participants whose retirement savings have been held in the plan since September 15, 2014. A significant development in March 2022 allowed most of the plaintiffs’ claims regarding fiduciary breaches to proceed beyond initial dismissal.
The jury determined that the Pentegra board of directors and its members, including Sandra L. McGoldrick and Michael N. Lussier, failed to uphold their fiduciary responsibilities, leading to the payment of excessive recordkeeping and administrative fees to Pentegra Services Inc. The verdict also implicated former CEO John E. Pinto for his role in approving these unreasonable charges.
Evidence presented at trial established that both Pinto and Pentegra Services Inc. contributed to these breaches by knowingly allowing the plan to incur inflated fees. The jury concluded that the board and Pinto either actively participated in the wrongdoing or neglected their duty to address it adequately.
In total, the jury awarded damages amounting to $38,760,232 to the affected participants. Their representation came from Schlichter Bogard LLC, while Pentegra was defended by the Groom Law Group.
While the jury verdict addressed these major issues, additional allegations concerning prohibited transactions remain unresolved. These issues will be addressed in court in a separate proceeding.
The case highlights the challenges faced by retirement plan participants in ensuring that fiduciary duties are met and underscores the ongoing scrutiny of administrative fees within retirement plans.
This article was automatically generated by OpenAI. The details mentioned may be inaccurate, and any article can be requested for removal, retraction, or correction by contacting [email protected].