On September 25, 2017, the Honorable Judge Robert E. Blackburn, of the U.S. District Court for the District of Colorado, denied the motion for summary judgment of Defendants, Great-West Life & Annuity Insurance Company, Great-West Life & Annuity Insurance Company of New York, Great-West Trust Company, LLC, and Advised Assets Group, LLC, collectively doing business as Empower Retirement (collectively, the “Defendants”), in a lawsuit brought under the Employee Retirement Income Security Act (“ERISA”). Wahan Krikorian (“Plaintiff”), on behalf of the TPS Parking Management, LLC 401(k) Plan (the “Plan”) and all other similarly situated employee benefit plans, alleges that Defendants breached their fiduciary duties under ERISA in connection with their role as a “service provider” of the Plan.
Defendants provide administration services to the Plan, and are compensated for such via a revenue sharing agreement. Plaintiff alleges that Defendants’ revenue sharing practices do not comply with ERISA requirements. The United States Department of Labor has interpreted ERISA to permit revenue sharing payments to plan fiduciaries acting as service providers if certain requirements are met. One of the conditions is that the service provider must offset any revenue sharing fees it receives, on a dollar-for-dollar basis, against the fees owed to the service provider by the plan. Plaintiff alleges Defendants do not consistently offset the revenue sharing fees they receive while Defendants claim the evidence shows that they do. The Court ruled that because the evidence demonstrates the existence of a genuine dispute of material fact on this key issue, Defendants were not entitled to summary judgment.
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