SeaWorld Parks & Entertainment Inc. recently agreed to a $1.25 million settlement in a class-action lawsuit filed by employees who alleged excessive fees and mismanagement of the company’s retirement plan. The settlement, which resolves a three-year legal battle, covers approximately 40,000 participants who were enrolled in the plan over a period of nearly 10 years, beginning in August 2015. The case highlights key fiduciary practices for plan sponsors.
The Allegations
Filed in 2021, the lawsuit claimed that SeaWorld violated the Employee Retirement Income Security Act (ERISA) in several ways. Plaintiff's allegations included: high recordkeeping fees, poor investment performance, and failing to seek more competitive financial terms through an RFP process. U.S. District Court Judge Robert S. Huie, who presided over the case, denied the defendants’ previous requests to dismiss claims related to high-cost share classes, underperforming mutual funds, the inclusion of a stable value fund, excessive advisory fees, and inadequate fiduciary oversight. Company employees estimated that their total damages amounted to $10.8 million.
High Fees a Whale of a Problem for Fiduciaries
One of the most critical practices for plan sponsors and advisors is regular benchmarking. This process ensures that fees, investment options, and service provider costs are in line with industry standards, reducing risks for both participants and fiduciaries.
Advisors using tools like PlanFees Prism, Prism365, and RFP Express, powered by RPAG, can:- Compare investment, recordkeeping, administration, and advisory fees against market averages to identify cost-saving opportunities.
- Obtain instant quotes from the industry's top recordkeepers on plans up to $10 million in assets or more.
- Provide clear documentation to help demonstrate fiduciary due diligence.
Proactive benchmarking isn’t just a compliance measure — it allows fiduciaries to see deeper into the waters of plan performance to help deliver better outcomes for plan sponsors, participants, and beneficiaries. And with modern tools making benchmarking fast and easy, it’s something you can do annually or whenever the circumstances warrant a review.
Staying Afloat With Competitive Practices
The SeaWorld settlement also underscores the importance of competitive bidding and regular oversight. Service providers should be evaluated periodically to ensure reasonable fees are charged for the value and services provided. Tools like RFP Express, powered by RPAG, streamline the process, helping advisors secure more cost-effective solutions.
Regular Benchmarking Can Help Avoid an Ocean of Trouble
Whether your client is a big fish or a minnow in the retirement plan ocean, your fiduciary reputation is always on the line. There’s a sea change underway in the retirement plan industry — top advisors can use PlanFees tools as part of a comprehensive risk mitigation strategy to help safeguard their plans … and that’s no fish story.
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