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T. Rowe Price 401(k) Plan Excessive Fee Case

Although a plaintiff “total victory” is deemed improbable by the judge, this case is proceeding to trial. Plaintiffs claim that T. Rowe Price 401(k) Plan fiduciaries breached fiduciary duties through offering only T. Rowe Price funds, providing a “windfall to T. Rowe Price affiliates.” Upon review, the judge has found that the evidence does not “conform with the plaintiffs’ allegations of shocking and pervasive mismanagement”, nor the “sort of egregious improprieties that would support the nine-figure damages award” sought. The judge, however, has explained that plaintiffs “must only produce evidence, that if accredited, would be sufficient for a fact-finder to surmise that Defendants took some unlawful actions and therefore caused Plaintiffs at least some harm.” On that basis, the Plaintiffs have “cleared the low bar that avoids a summary judgment in favor” of the Defendant, and therefore, the Plaintiffs are entitled to a trial.

This case represents one of many that have been filed against financial companies for inclusion of affiliated investment products in their respective 401(k) plans. Several have reached settlement and have not proceeded to trial.

www.napa-net.org; February 11,2021.