This Is Why You Monitor Your Record Keeper

Last Updated: November 17, 2016

The world seems to have changed a great deal in recent days, but at least one thing remains unchanged.  Another excessive fee lawsuit has been filed, this time in the Eastern District of Michigan against Xerox HR Solutions, Inc.  The plaintiffs are participants in three Ford Motor Company retirement plans, and are seeking class certification to make this suit a class action suit.  The combined assets of the three plans come to nearly $14 billion.

Unlike many of the excessive fee lawsuits that we have seen over the past few years, this suit has been filed against the record keeper, rather than against the plan sponsor or retirement plan committee.  The complaint alleges that Xerox (the record keeper for the three Ford plans) made investment advice available to the participants through a computer based investment advice company called Financial Engines (“FE”).  The complaint then alleges that Xerox, as a precondition to making FE’s investment advice tools available on their platform, required FE to overcharge participants and pay Xerox a “kick back” from the fees charged for providing investment advice.  Further, the complaint alleges that Xerox offered no additional services or benefits to participants in return for this “kick back.”  The complaint alleges that between 2012 and 2015, participants in the three Ford plans over paid FE by over $4.8 million.

An essential piece of having a top-performing retirement plan is to have a top-performing setup with your plan’s record keeper.  As plan fiduciaries, it is important to take a deep dive into your plan’s fees, looking at every dollar paid by participants and the plan sponsor in order to determine that the fees being paid are necessary and reasonable.

To discuss how and why to monitor your record keeper contact our Vendor Services Team, or call 800-234-9584.

Chendes v. Xerox HR Sols. LLC, E.D. Mich., No. 2:16-cv-13980, complaint filed 11/9/16.

PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or development.


Pension Consultants, Inc.



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