Retirement Plan Expert Witness' Recordkeeping Fees Calculation Rejected

Retirement Plan Expert Witness’ Recordkeeping Fees Calculation Rejected

A district judge in Pennsylvania refused to admit the Retirement Plan Expert’s opinions on “excessive” recordkeeping fees being charged.

Plaintiff, John McCauley accused PNC Financial Services Group and a Committee appointed to oversee the administration of PNC’s 401(k) Plan of breaching their fiduciary duties under ERISA by allowing the Plan to pay “excessive” fees to the Plan’s recordkeeper, Alight.

McCauley sought to introduce Ty Minnich as an expert witness who would provide opinions on the following topics: (1) whether Alight charged excessive recordkeeping and administrative fees; (2) what the reasonable market rate for the Plan’s services would be; and (3) the amount of Plaintiffs’ damages. 

PNC sought to exclude Minnich’s expert testimony, arguing that it was not reliable because his opinion was based solely on his experience “without [using] any reproduceable or traceable process.” 

Retirement Plan Expert Witness

Ty Minnich has 30 years of experience as a financial services professional, during which he specialized in 401(k) and 403(b) retirement plans and the applicable fiduciary duties. For the past 15 years, he has been responsible for overseeing and conducting requests for proposals (“RFPs”) and pricing processes in the industry.

Want to know more about the challenges Ty Minnich has faced? Get the full details with our Challenge Study report. 

Discussion by the Court

Minnich’s Opinion on the Reasonable Market Rate

Minnich asserted that he based his expert opinion on his industry experience and three pertinent factors: participant count, the services provided, and any ancillary revenue.  He maintained that the first factor was the most important, explaining that “[w]hen the number of participants increase, the necessary recordkeeping fees would exponentially decline.” 

He further noted that in his industry experience, recordkeepers often create a pricing curve based on participant count and per person fees to determine the reasonable market rate. Minnich, however, did not create a pricing curve in this case.

He opined that the Plan received no services out of the ordinary that would have contributed to an increased price. Minnich also explained that an affiliate of the Plan’s recordkeeper received over $2.2 million in direct compensation in 2020. 

 He noted that this additional revenue stream meant that the recordkeeper “would likely have provided [] services to the Plan for substantially less throughout the Class Period had the Plan fiduciaries negotiated to achieve the reasonable market rate.”

Minnich, however, did not explain whether the recordkeeper received additional revenue in years other than 2020, and by how much exactly this compensation would have decreased the per person fees paid. 

The Court held that Minnich’s opinions were based on his subjective belief and experience and, therefore, he has not demonstrated that it is more likely than not that his testimony is the product of reliable principles and methods. For instance, Minnich did not create a pricing curve—despite indicating this is the industry norm—nor could he point to any other reliable methodology or scientific procedure he used to calculate his reasonable fees. 

Minnich’s Opinion that PNC could have negotiated lower recordkeeping fees

Minnich’s Report also pointed to four other retirement plans that he believed were comparable to the Plan and demonstrated that PNC “could have negotiated far lower recordkeeping fees.” 

The Court found, however, that these four comparator plans did not salvage the reliability of Minnich’s opinion.

Minnich’s Opinion as to the Amount of Damages

Minnich further opined that, based on his reasonable fee calculations, the amount of damages in this case was $25,122,422. But because Minnich’s reasonable fee calculation was based on an unreliable methodology, the Court found that his opinion as to the amount of damages was also unreliable and should be excluded.

In addition to the motion to exclude Minnich’s testimony, PNC also filed a motion for summary judgment on McCauley’s claims. The Court also granted PNC’s motion for summary judgment.


The Court denied the motion for summary judgment and motion to exclude the testimony of Ty Minnich, entering the final judgment in favor of PNC Financial Services Group, Inc.

Key Takeaway:

Minnich not only failed to identify a reliable methodology or process he used to calculate the reasonable market fee, he also chose his comparator plans with fees that supported his calculation. The Court found that Minnich’s comparator plans did not support the reliability of his methodology.

Case Details:

Case Caption:John Mccauley V. PNC Financial Services Group, Inc. Et Al
Docket Number:2:20cv1493
Court:United States District Court for the Western District of Pennsylvania
Order Date:June 21, 2024


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