On September 16, 2022, the Honorable Christy Criswell Wiegand of the Western District of Pennsylvania certified a class of over 65,000 current and former participants of the PNC Financial Services Group, Inc. Incentive Savings Plan (the “Plan”) in an ERISA lawsuit against PNC Financial Services Group, Inc. (“PNC”) and the PNC Financial Services Group, Inc. Incentive Savings Plan Administrative Committee (collectively, “Defendants”).
PNC is the plan sponsor for the Plan. With assets totaling approximately $6.9 billion, the Plan is in the top 0.1% of all defined contribution plans by size. Importantly, large plans like the Plan have substantial leverage to negotiate for lower fees and expenses charged against plan participants’ investments.
The Plan is a defined contribution 401(k) retirement plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), a federal statute establishing fiduciary standards for plan administrators to ensure that investments offered to employees are prudently selected and monitored.
Class representatives Henrena Johnson, Barbara Demps, and John McCauley (collectively, “Plaintiffs”) filed suit against PNC on behalf of the Class on October 2, 2020, alleging that Defendants violated ERISA by allowing the Plan to incur recordkeeping and administrative fees significantly higher than the average fees paid by similarly sized plans.
On March 31, 2022, Judge Wiegand granted in part and denied in part Defendants’ motion to dismiss the ERISA lawsuit. The Court reasoned that Plaintiffs’ comparison of PNC’s annual recordkeeping fee of more than $50 per participant to the significantly lower fees of similar plans created a plausible inference that PNC “failed to scrutinize the prevailing rates” for 401(k) plan recordkeeping services.
Subsequently, Plaintiffs and Defendants jointly stipulated to certify the lawsuit as a class action. In its approval, the Court found that the proposed class satisfied each of the four principal requirements of class actions: numerosity, commonality, typicality, and adequacy of representation. The Court accordingly defined the Class as “all participants and beneficiaries in the PNC Financial Services Group, Inc. Incentive Savings Plan at any time on or after October 2, 2014 to the present, including any beneficiary of a deceased person who was a participant in the Plan at any time during the Class Period.”
Plaintiffs, the Class, and the Plan are represented by Miller Shah LLP.
Updates will be posted to this blog as the matter progresses. The case caption for the lawsuit is Johnson et al v. PNC Financial Services Group, Inc. et al., Case No. 2:20-cv-01493-CCW, filed in the Western District of Pennsylvania.
The legal team at Miller Shah LLP has significant experience representing class action matters. If you have any questions regarding this subject or this post, please contact Anna D’Agostino (firstname.lastname@example.org) or Alec Berin (email@example.com). The firm can also be reached toll-free at (866) 540-5505.
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