Is This the Most Absurd 401k Fraud Case Yet?

Retirees are seeking compensation for 'failure to meet obligations as a trustee to protect their savings'

401k retirement, lawsuit, legal, ERISAIt's frustrating.

“You want to sue me?”

“Well, why not? Sue everybody.” – Jerky Boys, “Punitive Damages”

Anyone can be sued for pretty much anything. All a plaintiff needs is a court index number, filing and a server for the complaint.

This rather obvious point was reinforced recently in a case involving Vantage Benefits Administrators, a Dallas-based “TPA, recordkeeper and professional fiduciary” accused of criminal activity. Vantage offices were raided by the FBI last October.

I was recently contacted by a representative from Matrix Trust Company, the target of a class action lawsuit filed in a Colorado Federal Court.

Two retirees from Texas A&M allege Matrix provided custodial and trust services for section 403b retirement plans, including those associated with Texas A&M University, Vernon College, Collin College, Laredo Community College and Tarrant County College.

Vantage Benefits was the recordkeeper for those plans. The retirees are seeking compensation from Matrix for failing to meet its obligations as a trustee to protect their savings.

“This lawsuit is completely without merit,” a representative from Matrix stated. “Matrix Trust Company did not manage these investment accounts or serve as a trustee or fiduciary for them. This lawsuit involves accounts that were opened and managed by Vantage Benefits Administrators. Matrix’s actions were consistent with its custodial agreements and intends to vigorously defend itself against these baseless claims.”

I don’t usually opine about litigation, but I think Matrix is in the right, since 403b plans don’t have plan trustees. How did Matrix, therefore, serve in that capacity?

Matrix said they provided custodial services only for the plan; acting as a custodian doesn’t meet the level and duty of a plan fiduciary.

It seems that the plaintiff’s attorney doesn’t really understand how 403b plans work. It wouldn’t be the first time—and almost certainly won’t be the last.

Ary Rosenbaum is an author and  ERISA/retirement plan attorney for his firm, The Rosenbaum Law Firm P.C. He is also the host of That 401(k) Conference, a fun and informative retirement plan conference at Wrigley Field, September 13, 2018. Rosenbaum’s latest book, humbly titled “The Greatest 401(k) Book Sequel Ever,” is available in Kindle and paperback at

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