2023 Feb 8Alternative Investments, Complex Products

At McBride PC, we focus on performance of a pension or 401(k) plan, rather than fees. We are far more concerned that a plan offers its participants what was promised; that characteristics and risks are understood; and that funds are available when needed on retirement.

In recent years, 401(k) litigation has primarily focused on fees charged by plan administrators. This has been an important development for ERISA, but has rarely produced significant benefits to account values.

Fifteen years of 401(k) litigation has pushed ERISA plans away from mutual funds and toward “collective investment trusts” as a way to lower administrative fees, since collective investment trusts are largely unregulated (with lower administrative fees), while mutual funds are highly regulated (with marginally higher administrative fees).

focus on performance

But the consequence has been to drive pension money into dark investing corners of collective investment trusts that are not understood by an average plan participant–and involve a far greater degree of risk than a mutual fund.  So, fifteen years of 401(k) litigation has lowered plan fees–but has increased plan risk.

But collective investment trusts have lower reporting requirements under federal law.  The net result is that a pension plan may be loaded with risky alternative investments that generate high profits for investment managers–without your knowledge.

focus on performance

So now, plan sponsors often hide risky alternative investments inside a collective investment trust. These alternative investments generate far more profit for investment managers and trustees than do mutual funds–but put pension account money had a much higher risk, without disclosing that risk to participants.


Our primary work is to protect pension and benefit rights for employees — to focus on plan performance that protects pension funds for the benefit of plan participants and beneficiaries.


Kevin McBride is a Pension & Benefits Litigation Attorney in Los Angeles, California, USA.

He is admitted into three California US District Courts (Central, Southern, and Northern), the US District Court for the District of Utah, the Ninth Circuit Court of Appeals, and the Federal Circuit Court of Appeals. McBride holds a BA degree in Economics from the University of Utah and a JD from the University of Utah College of Law, where he served on the Utah Law Review. He is a member of the Federalist Society and the Federal Bar Association.