Insperity and Reliance Trust has settled a lawsuit for $39.8 million, alleging that they breached their fiduciary duties and committed prohibited transactions under the Employee Retirement Income Security Act (ERISA) relating to the management, operation, and administration of the Insperity 401(k) plan.
Insperity, a professional employer organization (PEO), offers a 401(k) plan to employees of small and medium-sized businesses. Insperity retained Reliance Trust as a discretionary trustee to hold, manage, and control the assets of the plan and to be responsible for selecting, retaining, and monitoring investment options available to participants.
The plaintiffs alleged that the defendants selected untested proprietary funds as investment options for the plan and retained those funds despite their poor performance, which benefited defendants at the expense of participants. It was alleged that because Insperity Retirement Services, a subsidiary of Insperity, served as the plan’s recordkeeper, there was a prohibited transaction where excess fees were paid.
