Recently, a Yale Law School professor sent letters to thousands of companies informing them of an academic study that he and a colleague are conducting on the fees charged under 401(k) plans. In each letter, Professor Ian Ayres explains that his study is based on publicly-available data from 2009 collected by BrightScope, which maintains a public website that analyzes companies’ retirement plans. In some of his letters he “identifies” a company’s 401(k) plan as “a potential high-cost plan” and cautions the company to remember its fiduciary obligations when monitoring the plan’s expenses. Professor Ayres’ letters further indicate that, upon the conclusion of his study in early 2014, he will publicize in newspapers and through social media sites (such as Twitter) the names of the companies that he believes maintain high-cost plans. A sample copy of his letter can be found here.
Many questions have been raised about Professor Ayres’ study because it is based on data that is out-of-date and does not accurately portray plan fees or take into account the complexities of a plan’s design and administration. As a result, the findings from his study may be suspect when they are published next year. Nevertheless, due to its large scope and the publicity that is likely to be generated, Professor Ayres’ study serves as yet another reminder to companies to carefully consider their fiduciary duties under ERISA.