Mass Mutual Sued by Employees Over Excess 401(k) Fees & Underperformance

This lawsuit should motivate EVERY reader to learn more about the 402(a) fiduciary liability business owners who offer pension plans VIOLATE every day!

Opportunity, opportunity, opportunity!

                If I had a dollar for every time an advisor told me their biggest problem was not having enough new clients, I’d have retired years ago. Helping business owners eliminate their 402(a) fiduciary liability offers unprecedented OPPORTUNITY to pick up NEW and AFFLUENT business owners  as clients.

Use a 402(a) Pension Fiduciary to Pick Up Affluent Business Clients
Webinar on Recording

To watch this terrific webinar on 402(a) fiduciary liability, click on the following link:

Mass Mutual Gets Sued Again

If you didn’t know, back in 2013 Mass Mutual (MM) was sued in a class action lawsuit by its employees for violating their fiduciary duty in their company’s pension plan. The suit settled for $30 million dollars.

You might also be interested to know that also back in 2013, Ameriprise was sued by employees over excessive 401(K) costs. The outcome of that lawsuit was a $27.5 million settlement.

To read the actual class action complaint against MM, click on the following link:

                Why was MM sued?

Keep in mind when reading about the alleged problems that plan fiduciaries have a duty of loyalty and prudence with respect to decisions relating to plan investments, recordkeeping, and expenses.

1) Excessive fees—MM’s pension is huge thereby giving MM tremendous bargaining power. However, MM didn’t use that power to negotiate lower expense ratios in funds offered to the EEs in their plan. It’s alleged that several other lower cost and nearly identical mutual funds/ETFs were available to MM but not used (causing millions of dollars in excess fees over time).

Also, the record keeping fees were significantly higher than they should have been for a plan that size and were more in line with the much more expensive bundled product that small employers many times are forced to use.

2) Retention of inferior mutual funds affiliated with MM—MM had several under-performing (under-performing the benchmarks) mutual funds and several of them were affiliated with MM (self-dealing).  Also, even the guaranteed investment account (a fixed income product) was much worse than several other alternatives MM could have used.

When you combine low returns, high expense ratios of investments offered, high recordkeeping expenses, and the fact that the plan has $4.1 billion in it representing over 23,000 participants, I think this liability could be 2-3-4 times the size of the liability of the first class action lawsuit that settled for $30 million.

402(a) Liability is Real


You can help employers by working with the firm that did the above-mentioned webinar. How? That firm will take over and indemnify the employer from the 402(a) duty (meaning if it’s deemed violated, the firm administering the pension will be financially liable).

This is an awesome marketing hook to pick up new business clients!

Does this hook work?

Absolutely! Advisors are moving over 10 plans (prior to year-end) from their current pension administrator to the firm that will indemnify the pension plan fiduciaries. A few of these plans have over $20 million in them.

One of the plans is a client of mine (doctor who read my new Divorce Planning Guidebook ( and was so happy with the help he received, he asked me to take over all of his financial stuff including his pension plan). Help a client with their divorce and they will be forever grateful to you 😊

Roccy DeFrancesco, JD, CAPP, CMP