Court Tosses Out Revenue-Sharing Claims After Finding Paychex Isn’t a Plan Fiduciary

Paychex Inc. will not be held liable under the Employee Retirement Income Security Act for collecting revenue-sharing payments from mutual funds that Paychex selects to be included in its prototype plans that are sold to various employers, the U.S. District Court for the Western District of New York ruled Aug. 2 (Zang v. Paychex Inc.).

Granting Paychex’s motion to dismiss a proposed class action brought by a tax code Section 401(k) plan trustee, Judge David G. Larimer found that Paychex was not an ERISA fiduciary and thus would not be exposed to liability for collecting the revenue-sharing payments. ...