If you haven’t heard of the Kellogg lawsuit, or if you’re confused about where it stands, you’re not alone.

To start, there are two separate lawsuits against Kellogg for how its handled its retirement and pension plans. The pension case (Reichert vs. Kellogg Co et al) was dismissed in April, but alleged that executives used outdated mortality tables when calculating benefits.

The second case, Fleming vs. Kellogg Co et al, alleged that the company didn’t properly monitor fees charged by the recordkeeper, which were ultimately passed on to plan participants. That lawsuit was also dismissed in April 2023… but unlike the pension lawsuit, an appelate court reversed the lower court decision this fall.

Under ERISA regulations, Kellogg will have to prove that any fees charged by the recordkeeper were reasonable and that they had a system in place to properly monitor those fees. Or, if you want a higher level smell test: Was the recordkeeper, and therefore Kellogg, acting and charging fees in a manner that prioritized plan participants? If anything was structured for the benefit of anyone other than plan participants, things could get dicey.

We’ll be monitoring this case closely, but in the meantime, we suggest you check out a few high level summaries to see what lessons, if any, the case might offer your company.

https://www.plansponsor.com/6th-circuit-revives-kellogg-excessive-fee-case-over-arbitration-clause-dispute/
https://www.plansponsor.com/kellogg-wins-pension-lawsuit-dismissal/