Keller Rohrback, a Seattle-based law firm and one of the leaders in 401(k) class action law suits, has now turned its attention to 403(b) plans. The firm, whose website is named ERISAfraud,com, announced its investigation into ithe National Education Association (“NEA”) Valuebuilder 403(b) variable annuity plan. As background, the NEA has 3.2 million members who work in public education, and it sponsors a 403(b) plan for them. 403(b) plans are named for that section of the Internal Revenue Code which permits employees of tax-exempt organizations under Section 501(c)(3) of the Code and certain educational insitutions to set aside money for retirement on a pre-tax basis – much like 401(k) plans.
The law firm is investigating whether the NEA is endorsing the program limited only to one vendor because of the revenue it receives, or whether it made a prudent decision to endorse the product because it was in the best interest of its members. While there is no certainty that a class action law suit will be filed, don’t expect the fee issue involving the underlying funding method of 403(b) plans, variable annuities, to go away soon.