AT&T 401(k) Class Suit Revived as 9th Cir. Charts New Course

A class of 245,000 people covered by AT&T Services Inc.'s 401(k) plan revived their lawsuit over fees and public disclosures when the Ninth Circuit on Friday said a plan’s recordkeeping contract can qualify as a prohibited transaction under ERISA.

AT&T’s decision to amend its existing recordkeeping contract with Fidelity Workplace Services to incorporate new brokerage and investment advisory services amounts to a prohibited transaction between a plan and an interested party, the US Court of Appeals for the Ninth Circuit said. The Employee Retirement Income Security Act’s prohibited transaction rules are “broad” and “unambiguous,” and they encompass “arm’s-length service transactions” ...