Class Action Claim Highlights the Importance of (Really) Analyzing 401(k) Revenue Sharing

On April 27, 2022, the U.S. District Court for the Northern District of California denied the defendant fiduciaries' motion to dismiss in the case of Reichert, et al. v. Juniper Networks, Inc., which was originally brought in August 2021 and amended in December 2021. By "net" investment expense, we simply mean the expense ratio minus revenue sharing, which the plaintiffs describe as being the proper cost/benefit barometer for plan participants. Citing to the Supreme Court's holding in Hughes v. Northwestern, the court stated simply that Plaintiffs allege that defendants mismanaged [a 401(k) plan] by paying unreasonably high fees for plan services, choosing high-priced investments over options with lower costs and better returns, not monitoring the plan adequately, and not disclosing plan information to participants... ...Plaintiffs have plausibly alleged the ERISA claims.