Neuberger Berman and its 401(k) Plan investment committee have been accused of fiduciary breaches under ERISA by offering expensive Neuberger or Neuberger affiliated funds that benefited Neuberger and its fund managers. One fund in particular is mentioned in the case, the Value Equity Fund, which according to the plaintiffs, was a high-fee poor performer. Despite the fund’s excessive fees and failing performance, the fund remains available in the plan, which according to the plaintiffs, constitutes a fiduciary breach, costing the plan over $130 million. The arrangement was one in which Neuberger profited immensely, receiving tens of millions in fees during the class period, and even more from other proprietary funds offered in the plan. The lawsuit also claims that every time the plan paid fees to Neuberger Berman Trust Company N.A., or other Neuberger entities as part of the plan’s investment in the fund, the defendants initiated a prohibited transaction.
www.planadviser.com; August 4, 2016.