No IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Transcription

1 No IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT JOSEPH RUPPERT, as trustee of and on behalf of FAIRMOUNT PARK, INC., RETIREMENT SAVINGS PLAN, and on behalf of all others similarly situated, Plaintiff-Appellant, v. PRINCIPAL LIFE INSURANCE COMPANY, Defendant-Appellee. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA DES MOINES BRIEF AMICUS CURIAE OF AARP IN SUPPORT OF PLAINTIFF-APPELLANT JAY E. SUSHELSKY AARP FOUNDATION LITIGATION MELVIN RADOWITZ AARP 601 E Street, NW Washington, DC Telephone (202) jsushelsky@aarp.org Attorney for Amicus Curiae AARP Appellate Case: Page: 1 Date Filed: 11/04/ /07/2011 Entry ID:

2 CORPORATE DISCLOSURE STATEMENT Fed. R. App. P The Internal Revenue Service has determined that AARP is organized and operated exclusively for the promotion of social welfare pursuant to Section 501(c)(4)(1993) of the Internal Revenue Code and is exempt from income tax. AARP is also organized and operated as a non-profit corporation pursuant to Title 29 of chapter 6 of the District of Columbia Code Other legal entities related to AARP include AARP Foundation, AARP Services, Inc., Legal Counsel for the Elderly, AARP Financial, AARP Global Network, and Focalyst. AARP has no parent corporation, nor has it issued shares or securities. /s/jay E. Sushelsky Jay E. Sushelsky AARP Foundation Litigation i Appellate Case: Page: 2 Date Filed: 11/04/ /07/2011 Entry ID:

3 TABLE OF CONTENTS CORPORATE DISCLOSURE STATEMENT... i TABLE OF AUTHORITIES... iv INTEREST OF AMICUS CURIAE... 1 SUMMARY ARGUMENT... 2 ARGUMENT... 3 I. SMALL AND MEDIUM-SIZED BUSINESSES OFTEN HAVE LIMITED RESOURCES AND EITHER DO NOT OFFER RETIREMENT BENEFITS AT ALL OR RELY HEAVILY ON A THIRD PARTY ADMINISTRATOR TO OPERATE THEIR PLAN... 3 A. Many Small Employers Do Not Offer Their Employees Retirement Benefits Due To The High Cost Of Such Benefits... 3 B. Of The Small Employers Who Do Offer Retirement Benefits, Many Rely On A Third Party Provider To Administer the Plan... 5 II. OLDER EMPLOYEE PARTICIPANTS WORKING FOR SMALL AND MEDIUM-SIZED EMPLOYERS OFTEN DEPEND ON OUTSIDE FINANCIAL SERVICE PROVIDERS TO PROTECT THEIR RETIREMENT ASSETS... 7 A. Many Older Workers In Particular Lack The Financial Literacy Necessary To Manage Their Own Accounts... 7 B. Third Party Financial Service Providers Act In A Fiduciary Role With Investments Of The Rapidly Increasing Group Of Older Workers... 8 ii Appellate Case: Page: 3 Date Filed: 11/04/ /07/2011 Entry ID:

4 C. Reliance Upon Financial Service Providers To Operate Small And Medium-Sized Employer Plans Will Become Increasingly Important As The Employee Population Ages III. CLASS ACTIONS HELP EMPLOYEES OF SMALL AND MEDIUM-SIZED BUSINESSES EFFECTIVELY REDRESS FIDUCIARY MISCONDUCT BY PLAN FIDUCIARIES A. Congress Intended For ERISA To Protect The Interests Of Those Who Are Vulnerable, Especially Older Workers Who Are Nearing Retirement Age And Will Soon Need To Access Their Retirement Benefits B. Class Actions Facilitate Greater Accountability Under ERISA For Those Acting As Fiduciaries Where Recovery Would Otherwise Be Too Small An Amount To Warrant Pursuing The Claim In Court CONCLUSION CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE iii Appellate Case: Page: 4 Date Filed: 11/04/ /07/2011 Entry ID:

5 TABLE OF AUTHORITIES FEDERAL CASES Aetna Health, Inc. v. Davila, 542 U.S. 200 (2004) Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) American Pipe & Const. Co. v. Utah, 414 U.S. 538 (1974) Brown v. J.B. Hunt Transp. Services, Inc., 586 F.3d 1079 (8th Cir. 2009)... 12, 14 Darms v. McCulloch Oil Corp., 720 F.2d 490 (8th Cir. 1983) Harley v. Minnesota Min. and Mfg. Co., 284 F.3d 901 (8th Cir. 2002) Howe v. Varity Corp., 36 F.3d 746 (8th Cir. 1994) Kalda v. Sioux Valley Physician Partners, Inc., 481 F.3d 639 (8th Cir. 2007) LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248 (2008) Mace v. Van Ru Credit Corp., 109 F.3d 338 (1997) Shea v. Esensten, 107 F.3d 625 (8th Cir. 1997) iv Appellate Case: Page: 5 Date Filed: 11/04/ /07/2011 Entry ID:

6 FEDERAL STATUTES, RULES AND REGULATIONS Employee Retirement Income Security Act (ERISA), 29 U.S.C ERISA 404(a)(1), 29 U.S.C. 1104(a)(1)... 10, 12, 13 ERISA 502(a)(2) Fed. R. Civ. P. 23(b) H.R. Rep. No (1974), reprinted in 1974 U.S.C.C.A.N v Appellate Case: Page: 6 Date Filed: 11/04/ /07/2011 Entry ID:

7 MISCELLANEOUS AARP, 401(k) Participants Awareness and Understanding of Fees, available at 401k-fees-awareness-11.pdf... 8, 9 AARP, Investor Perceptions and Preferences Toward Selected Stock Market Conditions and Practices: An AARP Survey of Stock Owners Ages 50 and Older, p. 4 (Mar. 2004), available at 8, 9 Robert L. Clark, Melinda Sandler Morrill, and Steven G. Allen, The Role of Financial Literacy and Knowledge in Determining Retirement Plans, College of Management, North Carolina State University, Sept. 2009, available at _ pdf... 7 Deloitte for the Investment Company Institute, Defined Contribution/ 401(k) Fee Study: Inside the Structure of Defined Contribution/ 401(k) Plan Fees: A Study Assessing the Mechanics of What Drives the All-In Fees, Spring 2009, Updated June 2009, available at 3, 4 Kathryn Kobe, Small Business Retirement Plan Availability and Worker Participation, Economic Consulting Services, LLC for SBA Office of Advocacy, Mar. 2010, available at 4 Jules H. Lichtenstein, Saving for Retirement: A Look at Small Business Owners, Office of Advocacy, U.S. Small Business Administration, Mar. 2010, 4, 6 vi Appellate Case: Page: 7 Date Filed: 11/04/ /07/2011 Entry ID:

8 MetLife, Study of Employee Benefits Trends: A Blueprint for the New Benefits Economy, 2011, available at com/assets/institutional/services/insignts-and-tools/ebts/ Employee-Benefits-Trends-Study.pdf... 5 MetLife, Study of Employee Benefits Trends: Findings from the National Survey of Employers and Employees, Seventh Annual, 2009, available at trends/downloads/metlife_ebts09.pdf... 7, 8 Principal Life Ins. Co., 2010 Annual Report on Form 10-K, available at annualmeeting10k2010.pdf... 6 Scott Shane, Fix the Retirement Plan Gap for Small Employers, Bloomberg Businessweek, Apr. 16, 2010, available at sb _ htm... 4 Statement of David M. Walker, Comptroller General of the United States, Older Workers: Some Best Practices Strategies for Engaging and Retaining Older Workers, Government Accountability Office, Feb. 28, 2007, available at items/d07433t.pdf... 7 Mitra Toossi, Employment Outlook: : Labor Force Projections to 2018: older workers staying more active, Monthly Labor Review, Nov. 2009, available at art3full.pdf vii Appellate Case: Page: 8 Date Filed: 11/04/ /07/2011 Entry ID:

9 U.S. Dep t of Labor, Bureau of Labor Statistics, Older Workers: Are there more older people in the workplace? 10 U.S. Dep t of Labor, EBSA, Private Pension Plan Bulletin Historical Tables Graphs, Dec. 2010, available at 6 U.S. Small Business Administration, Small Employers Without Plans, 4, 5 viii Appellate Case: Page: 9 Date Filed: 11/04/ /07/2011 Entry ID:

10 INTEREST OF AMICUS CURIAE 1 AARP is a nonpartisan, nonprofit organization dedicated to representing the needs and interests of persons aged fifty and older. Nearly half of AARP s members are employed full or part-time, with many working for employers who provide pension and health plans covered by ERISA. One of AARP s primary objectives is to foster the economic security of individuals as they age by attempting to ensure the availability, security, equity, and adequacy of public and private pension, health, disability, and other employee benefits through educational and advocacy efforts. Participants in private, employer-sponsored employee benefit plans rely on ERISA to protect their rights under those plans. In particular, ERISA s protections, and plan participants opportunities to enforce the statute s protections, are of vital concern to workers of all ages and to retirees, since the quality of workers lives in retirement will depend heavily on their retirement plan benefits. Given the primacy of defined contribution plans in the American workplace landscape, it is imperative that fiduciaries of ERISA-governed plans be held to a high standard of duty to manage plans prudently. The resolution of the issues in 1 Pursuant to Fed. R. App. P. 29(c)(5), amicus certifies that no party or party s counsel authored this brief in whole or in part; and no person other than amicus contributed money intended to fund the brief s preparation or submission. 1 Appellate Case: Page: 10 Date Filed: 11/04/ /07/2011 Entry ID:

11 this case will have a direct and vital bearing on individuals ability to obtain those benefits which will foster their economic security. AARP, therefore, submits its brief amicus curiae to facilitate a full consideration by this Court of these issues. SUMMARY OF ARGUMENT Small or medium-sized employers often lack the resources to independently administer retirement plans for their employees. Instead, many rely on third party administrators to act as plan fiduciaries and to administer the plans. Older workers approaching retirement age are particularly dependant on third party administrators proper management of retirement plans since mismanagement of retirement funds could mean that older workers might not be able to afford to retire when they had planned. The very purpose of ERISA is to help ensure that plan participants, especially those who are most vulnerable such as older workers, are adequately protected. Fiduciary duties are imposed on third party administrators, requiring them to adhere to strict requirements of loyalty and fair dealing with respect to the plans for which they serve as fiduciary. As a means of protecting participants rights, ERISA provides a federal cause of action for breaches of fiduciary duties. Class actions are particularly useful and efficient vehicles through which employees can seek to protect their rights and to remedy wrongdoing by an ERISA 2 Appellate Case: Page: 11 Date Filed: 11/04/ /07/2011 Entry ID:

12 fiduciary. Class actions help ensure that even if the recovery will be of relatively small monetary value, the harmed participants will be able to effectively present their case in court. Any barriers to such efforts would harm the individuals ERISA seeks to protect. ARGUMENT I. SMALL AND MEDIUM-SIZED BUSINESSES OFTEN HAVE LIMITED RESOURCES AND EITHER DO NOT OFFER RETIREMENT BENEFITS AT ALL OR RELY HEAVILY ON A THIRD PARTY ADMINISTRATOR TO OPERATE THEIR PLAN. A. Many Small Employers Do Not Offer Their Employees Retirement Benefits Due To The High Cost Of Such Benefits. Although medium-sized employers tend to offer retirement plans for their employees, for small employers, in particular, the costs of offering employee retirement benefits can be prohibitively expensive. According to a 2009 Deloitte study for the Investment Company Institute, the average 401(k) plan all-in fee for an employer with fewer than one hundred employee participants was 2.03 percent of the plan s assets. Deloitte for the Investment Company Institute, Defined Contribution/401(k) Fee Study: Inside the Structure of Defined Contribution/401(k) Plan Fees: A Study Assessing the Mechanics of What Drives the All-In Fees, Spring 2009, Updated June 2009, available at 3 Appellate Case: Page: 12 Date Filed: 11/04/ /07/2011 Entry ID:

13 401k_fee_study.pdf. However, this average cost was only 0.49 percent of the assets for plans with over ten thousand employee participants. Id. Most small employers do not offer employer-sponsored retirement benefits because their resources are scarce. According to a March 2010, study by the Small Business Administration, in 2006 approximately 72 percent of small business employees were not able to obtain retirement plans through their employers. Kathryn Kobe, Small Business Retirement Plan Availability and Worker Participation, Economic Consulting Services, LLC for SBA Office of Advocacy, p. 4, Mar. 2010, available at tot.pdf; see also Jules H. Lichtenstein, Saving for Retirement: A Look at Small Business Owners, Office of Advocacy, U.S. Small Business Administration, p. 9, Mar. 2010, (explaining that as of 2004, only 18 percent of small businesses owned 401(k) plans); Scott Shane, Fix the Retirement Plan Gap for Small Employers, Bloomberg Businessweek, Apr. 16, 2010, available at _ htm. In 2003, a Small Employer Retirement Survey indicated that 43 percent of the 300 employers with five to 100 employees surveyed did not offer, and were unlikely to offer their employees retirement benefits in the following two years. U.S. Small Business Administration, Small Employers Without Plans, 4 Appellate Case: Page: 13 Date Filed: 11/04/ /07/2011 Entry ID:

14 Of the employers surveyed who did not offer employees retirement plans, the highest percentage (27 percent) indicated that they did not offer such plans because [r]evenue is too uncertain/too low. Id. The next highest percentage (16 percent) of respondents indicated that it [c]osts too much to set up and administer. Id.; see also MetLife, Study of Employee Benefits Trends: A Blueprint for the New Benefits Economy, p. 10, 2011, available at -and-tools/ebts/employee-benefits-trends-study.pdf. ( Not surprisingly, [33 percent of] employers this year report that managing benefits costs is by far their most important benefits objective. ). B. Of The Small Employers Who Do Offer Retirement Benefits, Many Rely On A Third Party Provider To Administer The Plan. Yet, despite the cost, more businesses of all sizes, including some small employers, are offering their employees retirement benefits. According to the U.S. Department of Labor s Employee Benefits Security Administration (EBSA), for small employers with fewer than 100 participants, total retirement plan assets, including both defined benefit and defined contribution plans, in millions of dollars began at 32,308 in 1975 and increased in millions of dollars to 525,890 by Appellate Case: Page: 14 Date Filed: 11/04/ /07/2011 Entry ID:

15 U.S. Dep t of Labor, EBSA, Private Pension Plan Bulletin Historical Tables Graphs, p. 15, Dec. 2010, available at historicaltables.pdf. Total assets for defined contribution plans in particular increased in millions of dollars from 23,527 in 1975 to 488,659 by Id. Similarly, for medium and larger employers with 100 or more participants, the total retirement plan assets in millions of dollars was 30,557 in 1975 and increased to 353,536 by 2008, representing an increase for defined contribution plan assets in millions of dollars from 8,090 in 1975 to 255,081 by Id. at 20. Even though large employers may be able to effectively administer their own employee benefit plans, smaller and medium-sized employers lack the human resources necessary to administer plans on their own, and therefore frequently depend on outside financial firms, such as Principal Life Ins. Co., to administer the company plan. 2 See Lichtenstein at 30 ( owners of larger businesses are much more likely than micro-business owners to participate in 401(k)/Thrift plan 38.5 percent versus 16.1 percent. ). 2 Principal Life Ins. Co. s target market is small and medium-sized employers. Principal Life Ins. Co., 2010 Annual Report on Form 10-K, available at ( Our primary target market is plans sponsored by small and medium-sized businesses ). 6 Appellate Case: Page: 15 Date Filed: 11/04/ /07/2011 Entry ID:

16 II. OLDER EMPLOYEE PARTICIPANTS WORKING FOR SMALL AND MEDIUM-SIZED EMPLOYERS OFTEN DEPEND ON OUTSIDE FINANCIAL SERVICE PROVIDERS TO PROTECT THEIR RETIREMENT ASSETS. A. Many Older Workers In Particular Lack The Financial Literacy Necessary To Manage Their Own Accounts. Older workers in particular are often greatly affected by retirement investment decisions, although many lack the financial literacy necessary to independently make informed retirement planning decisions. See generally Statement of David M. Walker, Comptroller General of the United States, Older Workers: Some Best Practices Strategies for Engaging and Retaining Older Workers, Government Accountability Office, Feb. 28, 2007, available at Robert L. Clark, Melinda Sandler Morrill, and Steven G. Allen, The Role of Financial Literacy and Knowledge in Determining Retirement Plans, College of Management, North Carolina State University, Sept. 2009, available at Plans_ pdf. According to a 2009 MetLife survey, as of November 2008, only 39 percent of employees felt confident in their ability to make the right financial decisions, leaving the remaining approximately 61 percent of employees who presumably were not confident in their own financial decision-making abilities. MetLife, Study of Employee Benefits Trends: Findings from the National Survey of 7 Appellate Case: Page: 16 Date Filed: 11/04/ /07/2011 Entry ID:

17 Employers and Employees, Seventh Annual, 2009, available at Many older workers in particular lack the requisite knowledge to make their own financial decisions. Results from an AARP study conducted in February 2011 show that [t]hose [respondents] ages 50+ (83 percent) are more likely than respondents ages (74 percent) to say that they have reviewed the status of their 401(k) plan. AARP, 401(k) Participants Awareness and Understanding of Fees, p. 4, available at The study found that 71 percent of respondents did not know that they paid 401(k) provider fees for managing their accounts. Id. at 1. Of these individuals, 62 percent were unaware of how much they are paying in fees for their plans, and 32 percent indicated that they do not feel knowledgeable about the impact that fees could have on their retirement savings. Id. B. Third Party Financial Service Providers Act In A Fiduciary Role With Investments Of The Rapidly Increasing Group Of Older Workers. In a 2004 survey, AARP found that 74 percent of respondents said they would prefer for others to manage their investments for them. AARP, Investor Perceptions and Preferences Toward Selected Stock Market Conditions and Practices: An AARP Survey of Stock Owners Ages 50 and Older, p. 4 (Mar. 2004), available at 8 Appellate Case: Page: 17 Date Filed: 11/04/ /07/2011 Entry ID:

18 Though employees tend to review information regarding their 401(k) plans, many do not fully understand the terms and their significance and consequently, rely on financial groups for assistance. According to a February 2011 AARP report, 35 percent of those surveyed indicated that they prefer suggestions from a professional, and most often use their recommendations or prefer to rely solely on the professional to manage their investments. AARP, 401(k) Participants Awareness and Understanding of Fees, p. 4, available at 11.pdf; see also id. at 5 (explaining that when determining whether to rely on a financial group s advise, 92 percent of respondents indicated that they placed significant weight on the [r]eputation of the financial services company that managed the investments. ). The third party administrator plays a crucial role for employers and employees, particularly those in small and medium-sized businesses who might otherwise lack the resources to support the plans on their own. As older workers approach retirement age, the fiduciary s actions can have a significant impact on these employees ability to retire. Many older employees are often unable to understand their retirement plans. Id. at 2. The financial services providers upon whom older workers are dependent make significant investment decisions on behalf 9 Appellate Case: Page: 18 Date Filed: 11/04/ /07/2011 Entry ID:

19 of the plan and the participant employees. These service providers narrow investment options and work with plan sponsors to develop the plan s investment options to offer to employees. As a result of the crucial role that these investment groups play, they are held to ERISA s fiduciary standards and are ultimately responsible for conducting themselves in the plan s and participant employees best interests. ERISA 404(a)(1), 29 U.S.C. 1104(a)(1). ERISA 1104(a)(1) requires plan fiduciaries to manage employee benefits solely in the interest of the participants and beneficiaries. Id. C. Reliance Upon Financial Service Providers To Operate Small And Medium-Sized Employer Plans Will Become Increasingly Important As The Employee Population Ages. The role of the fiduciary is particularly important for the increasing older employee population. As the population ages and more employees approach retirement age, more individuals begin to depend on their retirement savings and the fiduciary s management of their retirement plans. Between 1995 and 2007, the Department of Labor s Bureau of Labor Statistics reported that the number of older-workers on full-time work schedules nearly doubled. U.S. Dep t of Labor, Bureau of Labor Statistics, Older Workers: Are there more older people in the workplace?, July 2008, There 10 Appellate Case: Page: 19 Date Filed: 11/04/ /07/2011 Entry ID:

20 are more workers over 65 continuing to work full time, representing a 101 percent increase between 1977 and Id. Furthermore, the Bureau of Labor Statistics anticipates the number of older workers above the age of 55 to increase such that 12 million of the projected 12.6 million worker increase between 2008 and 2018 will fall into the category of older workers. Mitra Toossi, Employment Outlook: : Labor force projections to 2018: older workers staying more active, p. 31, Monthly Labor Review, Nov. 2009, available at Ultimately, the Bureau of Labor Statistics projects a 43 percent increase in older workers by 2018, reaching approximately one quarter of the workforce. Id. Thus, as a result of worker demographics and the heavy reliance by workers in small and medium-sized businesses on third-party plan administrators for management of their retirement assets, the role of financial service providers operating in the same market space as Principal looms larger in the years to come. 11 Appellate Case: Page: 20 Date Filed: 11/04/ /07/2011 Entry ID:

21 III. CLASS ACTIONS HELP EMPLOYEES OF SMALL AND MEDIUM-SIZED BUSINESSES EFFECTIVELY REDRESS FIDUCIARY MISCONDUCT BY PLAN FIDUCIARIES. A. Congress Intended For ERISA To Protect The Interests Of Those Who Are Vulnerable, Especially Older Workers Who Are Nearing Retirement Age And Will Soon Need To Access Their Retirement Benefits. Congress designed ERISA to protect plan participants by creating a uniform regulatory regime over employee benefits plans. Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004); see Harley v. Minnesota Min. and Mfg. Co., 284 F.3d 901, 907 (8th Cir. 2002) (quoting H.R. Rep. No (1974), reprinted in 1974 U.S.C.C.A.N. 4639, 4639) ( [t]he primary purpose of [ERISA] is the protection of individual pension rights. ). ERISA was enacted as remedial legislation that should be liberally construed to effectuate Congress s intent to protect plan participants. Brown v. J.B. Hunt Transp. Services, Inc., 586 F.3d 1079, 1086 (8th Cir. 2009). To facilitate such protections, fiduciaries are required by ERISA to act in the participants and beneficiaries interests. Retirement finances are of the most critical importance for older workers. Through ERISA, older workers can seek vindication of their rights for breaches of fiduciary responsibilities by those administering their retirement plans. Fiduciaries have strict obligations imposed on their actions including the obligation to disclose relevant information regarding the plan. See ERISA 404(a)(1), 29 U.S.C. 12 Appellate Case: Page: 21 Date Filed: 11/04/ /07/2011 Entry ID:

22 1104(a)(1); Kalda v. Sioux Valley Physician Partners, Inc., 481 F.3d 639, 644 (8th Cir. 2007); Shea v. Esensten, 107 F.3d 625, 629 (8th Cir. 1997); Howe v. Varity Corp., 36 F.3d 746, (8th Cir. 1994). An ERISA plan administrator s fiduciary responsibilities also include a prohibition from deal[ing] with the assets of the plan in his own interest or for his own account. 29 U.S.C Fiduciaries are liable to the plan and participants for a breach of any kind, regardless of the resultant amount of loss. LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248, 253 (2008) ( Although the record does not reveal the relative size of petitioner's account, the legal issue under 502(a)(2) [of ERISA] is the same whether his account includes 1% or 99% of the total assets in the plan. ). B. Class Actions Facilitate Greater Accountability Under ERISA For Those Acting As Fiduciaries Where Recovery Would Otherwise Be Too Small An Amount To Warrant Pursuing The Claim In Court. Congress intended for class actions to foster greater efficiencies in litigation and to enable individuals, particularly those in small businesses, to vindicate their rights in a way that these individuals might not be able to pursue on their own. See Fed. R. Civ. P. 23(b); American Pipe & Const. Co. v. Utah, 414 U.S. 538, (1974) ( [a] federal class action is no longer an invitation to joinder but a truly representative suit designed to avoid, rather than encourage, unnecessary filing of repetitious papers and motions. ). Specifically, class actions are designed to 13 Appellate Case: Page: 22 Date Filed: 11/04/ /07/2011 Entry ID:

23 overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. Amchem Products, Inc. v. Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (1997)). As a result, [a] class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone s (usually an attorney s) labor. Id. To most effectively accomplish the statute s purposes, ERISA claims often appear in the form of class actions. In ERISA claims brought by employees of small or medium-sized employers, a common grievance is most efficiently litigated as a class. See Brown v. J.B. Hunt, 586 F.3d at 1086 ( one of the purposes of 1133 [of ERISA] is to provide claimants with sufficient information ); Darms v. McCulloch Oil Corp., 720 F.2d 490, 493 (8th Cir. 1983) (denying class certification where plaintiffs could not agree among themselves as to the bases for the defendants liability, much less on the types of relief which would be fair to themselves and potential class members. ) This is particularly true for older individuals who are closer to retirement and are rapidly approaching the time when they will need their 401(k) plans which may ultimately define when they can stop working and retire comfortably. Class actions must be available to encourage employees to vindicate their ERISA rights and to ensure accountability for third party administrators of ERISA 14 Appellate Case: Page: 23 Date Filed: 11/04/ /07/2011 Entry ID:

24 plans. Despite the greater potential for harm to older workers, many are more willing to limit their losses rather than seek to vindicate their ERISA rights by initiating their own expensive law suit, especially when a relatively small amount of money is at stake, such as in the case of revenue sharing. It is crucial to ensure that the paths to effectively vindicate ERISA rights remain open such that employees maintain the ability to bring such suits in the form of class actions. CONCLUSION For the reasons stated above, AARP respectfully submits that the district court's judgment should be reversed and the case should be remanded for further proceedings. Respectfully submitted, Dated: November 4, 2011 /s/jay E. Sushelsky Jay E. Sushelsky AARP Foundation Litigation Melvin R. Radowitz AARP 601 E Street, NW Washington, DC Telephone (202) jsushelsky@aarp.org Attorney for Amicus Curiae AARP 15 Appellate Case: Page: 24 Date Filed: 11/04/ /07/2011 Entry ID:

25 CERTIFICATE OF COMPLIANCE This brief complies with the type volume limitation of Fed. R. App. P. 32 because this brief contains 2,744 words, excluding the parts of the brief exempted by Fed. R. App. P. 32. This brief complies with the typeface requirements and the type style requirements and has been prepared proportionally spaced typeface using Microsoft Word 2007, Times New Roman 14-point. November 4, 2011 /s/jay E. Sushelsky Jay E. Sushelsky AARP Foundation Litigation 16 Appellate Case: Page: 25 Date Filed: 11/04/ /07/2011 Entry ID:

26 CERTIFICATE OF SERVICE I hereby certify that on this 4th day of November, 2011, I electronically filed the foregoing Brief Amicus Curiae of AARP In Support of Plaintiff-Appellant with the Clerk for the United States Court of Appeals for the Eighth Circuit by using the CM/ECF system. I certify that the document has been scanned for viruses and it is virus-free. /s/jay E. Sushelsky Jay E. Sushelsky AARP Foundation Litigation Melvin R. Radowitz AARP 601 E Street, NW Washington, DC Telephone (202) jsushelsky@aarp.org Attorney for Amicus Curiae AARP 17 Appellate Case: Page: 26 Date Filed: 11/04/ /07/2011 Entry ID: