McDonalds 401k Plan Scrutinized by Legal Experts

McDonald’s 401k plan for corporate employees is being investigated for possible breaches of fiduciary duty.

A 401k plan is a defined contribution retirement plan, in which employees and the employer make a specific contribution but the exact payout upon retirement is not specified. Employees contribute a portion of their pre-tax pay to the plan, and their employers can make matching contributions, all according to the terms of the plan.

The employer, or whomever the employer hires to administer the plan, is charged with investing the plan funds to the participants’ benefit. McDonalds offers its corporate staff a 401k plan as part of its Profit Sharing and Savings Plan.

It’s a particularly generous retirement plan, considered one of the most generous plans of its kind, that McDonalds began offering in 2004 in an effort to recruit and retain higher-quality corporate employees.

The McDonalds 401k feature lets employees contribute anywhere from 1 to 50 percent of their pay, tax-deferred. McDonalds matches the employee’s contribution on a three-to-one basis for the first 1 percent, then on a one-to-one basis for the next 4 percent.

Certain employees also qualify for a discretionary profit sharing match of 0 to 4 percent based on the first 1 percent of their pay they contribute. Both the contributions and matching are fully vested right away. McDonald’s also offers corporate staff a direct stock purchase plan, credit union services, and financial planning services.

ERISA Protections for 401k Participants

For certain private-sector retirement plans like McDonalds 401k plan, the federal Employee Retirement Income Security Act of 1974, or ERISA, sets minimum standards. Each plan is required to have a fiduciary, a person or entity that controls the plan’s operation.

In exercising its discretion over the plan, a fiduciary owes certain duties to the plan’s participants, the most basic of which is to carry out all its duties prudently. Specifically, a fiduciary must act solely in the best interest of the participants and their beneficiaries, avoid conflicts of interest, act in compliance with the plan’s written terms (unless they conflict with ERISA), diversify plan investments, and pay only reasonable expenses associated with administering the plan.

Most importantly, ERISA gives plan participants the right to sue plan administrators when they breach their fiduciary duty. Fiduciaries who do not satisfy their duties as such can be personally liable to restore any losses to the plan caused by their breach of duty.

McDonalds Actions Under Scrutiny

Corporate employees now suspect that McDonalds 401k administration may have failed to live up to its fiduciary duties. They believe that starting in 2007, McDonalds may have made sub-par investment decisions that could have resulted in losses to its 401k plan. Such losses may have resulted in less earnings for individual employee’s accounts.

A legal investigation is underway into the administration of McDonalds 401k plan. Attorneys are interested in hearing from McDonalds corporate employees who signed up for a McDonalds 401k plan since 2007.

Positions that may qualify for plan participation include Director of Operations, District Manager Supervisor, District Trainer, Crew Trainers, Shift Managers, or Store Managers. This investigation is ongoing. No legal action has been taken yet.

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.

Join the Investigation Now