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A Jenner & Block team achieved a victory for Aon Hewitt after a judge dismissed claims that Aon Hewitt violated ERISA when it “engaged in a kickback scheme with a 401(k) plan robo-adviser” that allegedly increased fees for retirement plan participants. Cheryl Scott, a retired Caterpillar Inc. employee and 401(k) participant, alleged that Aon Hewitt, which provided record keeping and administrative services for Caterpillar’s 401(k) plan, breached its fiduciary duties when it subcontracted with Financial Engines to provide investment advisory services to plan participants. Ms. Scott claimed that this violation caused participants to pay “excessive fees which amounted to improper kickbacks,” according to court documents. The class action suit was filed in January 2017.
On March 19, 2018, US Magistrate Judge Jeffrey T. Gilbert concluded that the suit lacked evidence to support its claims and had not proven how Aon Hewitt was a fiduciary for the plan participants in the transaction.
“The court concludes that Caterpillar had sole authority to select and hire Financial Engines, and it is not plausible on this record that Hewitt had any final authority or control over the selection and hiring of Financial Engines,” Judge Gilbert wrote in his opinion. “The court is not persuaded by any of [the plaintiff’s] arguments in support of her claims that Hewitt is a fiduciary or has a fiduciary duty to her and the plan participant.”