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Reliance Trust/Insperity ERISA Class Action Lawsuit


This class action lawsuit alleges that Reliance Trust Company, Insperity and related entities breached fiduciary duties owed to participants and beneficiaries of an ERISA-covered 401(k) plan by allowing payment of unreasonable administrative and recordkeeping fees, payment of unreasonable investment management fees, using low-yielding money market funds without considering other options, failing to monitor fiduciaries and engaging in prohibited transactions between the plan and fiduciaries and the plan and parties in interest.

The plaintiffs in this lawsuit seek to represent a class of participants and beneficiaries in the Insperity 401(k) Plan ("Plan"), a defined contribution, individual account, employee pension benefit plan offered by Insperity to employees of small- and medium-sized businesses whose employer has contracted with Insperity to serve as its off-site human resources department. Defendant Reliance Trust Company is a bank with its principal place of business in Atlanta, Georgia. Defendant Insperity, Inc. is a for-profit corporation serving as a professional employer organization providing human resources and business solutions to businesses throughout the country.

Once a company enters into a service agreement with Insperity, its workers become eligible to participate in Insperity-sponsored plans in compliance with ERISA and other federal laws. Insperity promotes these plans to client companies, emphasizing the fiduciary role it assumes on behalf of clients when administering and managing the Plan. Insperity also promotes the investment services provided by Reliance Trust with respect to the Plan, referring to the company as "investment manager and trustee" who selects and continually monitors the investment options available to participants in the Plan.

Eventually, Insperity announced its plans to create Insperity Retirement Services, an entity designed to provide 401(k) recordkeeping services to the Plan and other defined contribution plans. Rather than obtaining bids, Insperity hired its own recordkeeping entity to service the Plan, a departure from its prior practice of retaining a third-party service provider. Since its inception, the Plan has been Insperity's largest and most profitable recordkeeping client. 

By 2003, Insperity retained Reliance Trust as discretionary trustee to hold, manage and control the assets of the Plan and to be responsible for selecting, retaining and monitoring of investment options available to participants. It is now alleged that Reliance Trust proceeded to select and retain its own high-cost and poorly performing Reliance Trust investments to benefit itself at the expense of Plan participants. In return for offering its own products, Reliance Trust is alleged to have selected investments that paid asset-based revenue sharing to Insperity's subsidiary for providing recordkeeping services.

As a result of the excessive management and recordkeeping fees charged to the Plan, imprudent and self-dealing investment selections, failure to monitor the actions of fiduciaries and the history of prohibited transactions between the Plan and fiduciaries and the Plan and parties in interest, the plaintiffs now request that the court declare that defendants are personally liable to make good to the Plan all losses resulting from the breaches. Plaintiffs also seek all accountings necessary to determine the amounts owed, removal of the fiduciaries who have breached their duties and an order enjoining them from future ERISA violations, a surcharge against defendants for all amounts involved in transactions ultimately deemed improper, excessive or in violation of ERISA, interest and attorney fees and costs of bringing suit.


Current Case Status: 

This class action lawsuit is dated Decenber 22, 2015. We will continue to review the docket in 2016 and provide updates as necessary.

Article Type: 

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