October 3, 2024
Hormel Foods Retirement Plans: What You Need to Know About a Recent Court Ruling
Hormel Foods Retirement Plans: Court Ruling & Impacts on Employee Benefits
The Wanta Thome attorneys won an important court ruling that has consequences for Hormel retirement plans. Wanta Thome recently brought a lawsuit in a Minnesota federal court against Hormel Foods alleging that the company had mismanaged certain retirement plans, resulting in lost value for its former employees who held assets in these plans. In an order on September 18, 2024, the court denied the motion to dismiss in its entirety, an important step toward holding Hormel accountable and achieving relief for affected plan participants.
Employee Retirement Income Security Act (ERISA) and Retirement Plans
Wanta Thome attorneys brought their case against Hormel asserting legal claims under the Employee Retirement Income Security Act (ERISA). When employers administer retirement plans, this law imposes an important “fiduciary duty,” making employers responsible for prudently managing their employees’ retirement savings. Among other responsibilities, retirement plans must be run in a way that prudently manages participants’ savings and avoids excessive fees and costs.
In essence, fiduciary duty requires careful attention to how retirement savings are being managed, with participants’ best interests at the forefront. This principle demands rigorous evaluation of investment options and commitment to prudent financial stewardship. When it comes to retirement planning, investing even fractions of a percent can make a big difference for investments’ performance. If fiduciaries are “asleep at the wheel,” and they don’t adequately monitor the cost or performance of plan investments, they can be held financially liable for participants’ losses.
Alleged Mismanagement of Hormel Foods Retirement Plans: Are Your Retirement Benefits Affected?
In the Hormel lawsuit, the Wanta Thome team has asserted that Hormel mismanaged two retirement plans: the Hormel Foods Corporation Joint Earnings Profit Sharing Trust and the Hormel Foods Corporation Tax Deferred Investment Plan A.
You may have heard others refer to these Hormel retirement plans as “401(k)” plans. If so, you should be aware that label is inaccurate, but it doesn’t affect the legal issues in this case. Your ERISA rights do not depend on whether these plans are characterized as a “401(k).”
The legal claims in this lawsuit potentially affect all participants in these Hormel retirement plans, including former employees and retirees. These plans, which together have more than $1.2 billion in assets under management, are now under scrutiny for alleged imprudent investment choices.
Key Issues in the Hormel Foods Retirement Plans Lawsuit
There are two specific issues that led to the lawsuit:
- Stable Value Investment Option:
- Whether Hormel selected an underperforming investment for the plans’ stable value fund. This selection may have caused retirement accounts to lose significant value over time.
- Mutual Fund Share Classes:
- Whether for certain plan investments, Hormel chose share classes with higher fees when lower-fee share classes were available. Even small differences in share class fees can significantly impact long-term performance.
These types of investment decisions highlight the need for careful oversight of retirement plan investments. When retirement plan administrators pick expensive or underperforming assets, these choices can significantly impact the long-term growth and stability of your retirement savings.
Contact Our Legal Experts with Questions
If you’re participating in Hormel’s retirement plans, the Wanta Thome team can help keep you informed about these issues and understand how they may impact your retirement savings. By safeguarding your retirement funds, you invest in both your future and your peace of mind. Wanta Thome is committed to defending your right to a financially secure retirement. Reach out to our experienced legal team today to ensure your retirement savings are in safe hands.