IHeart Communications Slammed with ERISA Class Lawsuit


iHeart Communications Inc. is now battling a proposed class action in the Northern District of Texas captained by plan participants and beneficiaries of its 401(k) plan. The plaintiffs of the case claim plan sponsors did not ensure prudent investment choices and maintained funds with higher than required costs that did not perform as expected.

Per the case, the plaintiffs allege that fiduciaries did not use the lowest cost share class for funds within the employee benefit plan and refused to consider the mutual fund’s options. What’s more, plan participants claim the defendants continuously mismanaged the plan, which had serious financial consequences to beneficiaries and plan participants.

The plaintiffs also firmly state that the Employee Retirement Income Security Act of 1974, or ERISA, imposes precise fiduciary duties of prudence and loyalty upon employers and other plan fiduciaries. Per the law, fiduciaries are instructed to act in the sole interest of plan participants and must deliver substantial consideration to the cost of investment choices to avoid wasting plan participant money. Continuing, the plaintiffs claim the Department of Labor holds fiduciaries at a high standard of diligence and care, and they must “establish a prudent process for selecting investment options and service providers and continue to monitor these investment options and providers, while also evaluating fees.” Consequently, the defendant’s conduct may cost millions of dollars and damage to the company’s reputation.

At Colonial Surety Company, the last thing we want is fiduciaries to be vulnerable to plan participant lawsuits such as these. With Fiduciary Liability Insurance, fiduciaries can protect themselves from covered plan participant lawsuits. What’s more, you can successfully manage a data-breach and safeguard the plan with Cyber Liability Insurance—all found in our ERISA bond combos and packagesClick here to obtain your ERISA fidelity bond package today.