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McDonalds receives criticism from some for the low wages it pays its employees, but in exchange it does offer a generous McDonalds 401(k) plan for employee benefits. According to the fast food chain’s policies, employees can set aside one percent of their wages and receive a 300 percent match from McDonalds ($3 for every $1 invested). The next four percent is matched 100 percent, and some workers enjoy a discretionary profit-sharing contribution of two percent.
As Lisa Emerson, McDonald’s vice president for global compensation told Benzinga.com, “We wanted to encourage people to start saving early in their careers.” And many do. However, while this is a great start for employees, if the money isn’t managed well, employees may not earn as much as they could, or should.
Some employers, such as McDonalds, are suspected of incorporating some irresponsible investments in their portfolios, causing their employees’ 401k plans to lose value. For employees around the country who potentially suspect this of their employers, there is protection. Employees who had a McDonalds 401k plan since 2007 can participate in a free class action lawsuit investigation to see if they have a legal claim.
Fiduciary Duty and Protection
According to the Wex Legal Dictionary, “A fiduciary duty is a legal duty to act solely in another party’s interests. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals.” Corporations who offer employees such benefits are, for all intensive purposes, fiduciaries, and as such have a responsibility to act in the best interest of the employees (participants). If they do not, it is constituted as a “breach of fiduciary duty” and may be subject to a lawsuit under ERISA.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established health and pension plans in private industry. Under this law, benefit plan managers (administrators, plan trustees and investment committee members) who do not act in the best interest of the employees, or provide information and support, are in violation of ERISA.
Imprudent Investments and the Supreme Court
A current appeal case in the U.S. Supreme Court will consider ‘imprudent investments’ as they revolve around 401k fees and statute of limitation laws under ERISA.
HRMorning.com states that Tibble v. Edison International is being heard “At the urging of the Obama administration, which told justices the lower court’s statute of limitations-based ruling “undermines the security and integrity” of billions of dollars in U.S. retirement plan funds, the Supreme Court agreed to hear the Edison appeal.” According to the case, Edison added six mutual funds to its 401k plan back in 1999. In their original lawsuit, employers call out stockbroker misconduct, and say that they were offered higher price retail class shares instead of the lower fee institutional class shares that were available. Moreover, the workers alleged that millions of dollars in fees were returned to their 401(k) service provider.
While the employees won some of their monies back in that first trial, they are still pursuing additional damages. Hence the statute of limitations discussion; under ERISA, the current statute of limitations is six years for 401k plan participants to file a violation lawsuit.
The Supreme Court should rule on this by June 2015, the end of their term. Should the Court find in favor of the Edison employees, it could have immense repercussions on employers like McDonalds and the retirement plan industry.
Join a Free McDonalds 401k Class Action Lawsuit Investigation
A class action lawsuit investigation is currently underway to pursue the possibility of taking legal action against McDonalds for potentially violating ERISA. If you are a McDonalds employee who signed up for a McDonalds 401k account since 2007, you may have a legal claim.
