Administration December 14, 2006

Deere Workers Hit Fidelity with Excessive 401(k) Fee Suit

December 14, 2006 (PLANSPONSOR.com) - At a time when retirement plan fees have become a hot-button issue, four Deere & Co. workers have sued Fidelity Investments over charges it levies unreasonable fees to manage the Deere 401(k) plan.
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The suit against the Boston-based investment company charges that it assessed plan participants expenses that “were, or are, unreasonable and/or not incurred solely for the benefit of plan participants,” according to a Reuters news report. Fidelity is trustee and recordkeeper for the Deere plan.

The plaintiffs argue that administrative fees and expenses can depress plan returns and “even seemingly small reductions in a participant’s return in one year may substantially impair his or her accumulated savings at retirement.”

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According to Reuters, the suit also charges that Deere and Fidelity were involved in a revenue sharing arrangement under which Fidelity shared with the customer some of the fees. The Deere employees said they were not told about the setup.

The plaintiffs have asked a federal judge in the US District Court for the Western District of Wisconsin to certify the suit as a class action so it can also represent thousands of other participants in the farm equipment maker’s 401(k) plan.

Spokesman Vin Loporchio of Fidelity told Reuters: “We disagree with many of the factual and legal assertions in the complaint and we intend to defend against the suit vigorously.”

Jerome Schlichter, whose law firm Schlichter, Bogard & Denton filed the Fidelity suit and has filed others against employer plans over 401(k) fees, was not immediately available to comment to Reuters (See Lawyer: Excessive Fee Suits Not an Organized Anti-Plan Campaign ).

Compliance December 13, 2006

UPS Settles Disability Discrimination Suit of Visually Impaired 'Sorter/Loader'

December 13, 2006 (PLANSPONSOR.com) - United Parcel Service (UPS) agreed to pay a former sorter/loader $100,000 to settle a discrimination suit that alleged the company fired him on grounds his degenerative eye disease was a safety hazard before a proper medical assessment was conducted.
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The company had fired Philadelphia resident Eugenio D’Oliveira in July 2004 when his supervisor noted that a visual impairment caused by a degenerative eye disease was a threat to his safety and the safety of his co-workers. He was a 17-year veteran of the company and worked as a sorter/loader.

According to the discrimination suit filed by the Equal Employment Opportunity Commission (EEOC) in May, D’Oliveira was suspended in April 2004 and asked to provide medical documentation about his degenerative eye condition, which he did. The agency said that the company made a judgment on whether D’Oliviera could safely perform his job without any medical evidence and failed to see if it could provide reasonable accommodations for him (See  UPS Faces Second Discrim Suit in Less than Two Months ).

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D’Oliveira suffers from retinitis pigmentosa, which causes the cells in the retina to degenerate and die, leading to progressive loss of vision.

In settling the suit with D’Oliviera, UPS did not admit to any wrongdoing, but agreed to train all hourly employees at the suburban Philadelphia location where D’Oliviera worked about disability discrimination by no later than February 28, 2007. The company also agreed to train full-time management personnel at the location within the next two years on compliance with the company’s anti-discrimination policies.

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