Expert Witness Profiler

Category: Retirement Plan Expert Witness

  • Retirement Plan Expert Witness’ State of Mind Opinions Excluded

    Retirement Plan Expert Witness’ State of Mind Opinions Excluded

    In 2016, Defendants Signode Industrial Group, LLC, and Illinois Tool Works, Inc. unlawfully terminated promised healthcare benefits for Plaintiffs, a class of retirees and their dependents. On March 26, 2019, this Court enjoined Defendants to reinstate Plaintiffs’ healthcare benefits that were in effect before January 1, 2016. Defendants implemented a new healthcare benefits plan effective January 1, 2020, but Plaintiffs contend that the new plan is deficient. In other words, Plaintiffs alleged that the 2020 Plan does not “reinstate, restore, and replicate” the 2002 Plan.

    Plaintiffs hired a healthcare consultant, Stuart Wohl to assess how the 2020 Plan compares to the 2002 Plan. Defendants filed a motion to exclude Wohl’s report and testimony. Defendants argued that the Wohl Report must be excluded because Wohl’s opinions allegedly “are not supported by appropriate citations and/or corresponding explanations,” are offered “about topics he does not understand,” and are “simply Wohl’s own speculation about retirees’ state of mind.”

    The parties did not dispute that Wohl is qualified as an expert to offer testimony on healthcare plans.

    Retirement Plan Expert Witness

    Stuart I. Wohl is a Senior Vice President and Senior Benefits Consultant for Segal, a human resource and benefits consulting firm hired by Plaintiffs. Wohl is a licensed Life and Health Insurance Consultant in multiple states with more than thirty years of healthcare consulting experience, specializing in retirement healthcare. 

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

    Discussion by the Court

    The Wohl Report provides Wohl’s opinions with respect to the material differences between the 2002 Plan and the 2020 Plan, along with additional opinions related to the sufficiency of the 2020 Plan in restoring the retirees’ healthcare.

    Wohl first concluded in the Wohl Report that the 2020 Plan “is and will be understood by the retirees as being materially different from the [2002 Plan]” until it was discontinued in January 2016.  He also concluded that Defendants’ 2020 Plan “overcharges retirees and discourages retirees from participating in” that Plan. Wohl stated that Defendants’ proposed remedies to rectify the period between 2016 and 2019 when the retirees had no healthcare “imposes unfair burdens on the retirees.”

    Wohl Report appears to be based on Wohl’s speculations supported by his own expertise

    The Court held that the Wohl Report frequently makes declarations that begin with “in my opinion,” and then provides Wohl’s professional opinion on a certain matter related to the Plans, without citations or further explanations for that opinion. For instance, the Wohl Report assesses that the 2020 Plan provides different coverage for ambulances, chiropractic care, nursing, and vision but fails to cite to either Plan in support of that assessment.

    In other words, the Wohl Report does not sufficiently connect Wohl’s expertise to the opinions presented in the Report.

    Wohl Report improperly contains references to retirees’ states of mind

    State of mind opinions are not proper expert testimony when the expert provides no basis or foundation for making those opinions. The Court observed that Wohl makes these conclusions about the retirees’ state of mind without providing any evidence that he spoke to any of the retirees.

    Wohl Report contains legal conclusions about remedies

    Certain sections of the Wohl Report contain inadmissible legal conclusions about what remedies Wohl believes are available and adequate in this case. The remedies available in this action are a disputed issue in this case that are the subject of one of Plaintiffs’ pending motions. The Court held that it is outside the scope of appropriate expert testimony for the Wohl Report to make legal conclusions about remedies.

    Held

    The Court granted the Defendants’ motion to exclude the report and testimony of Stuart Wohl.

    Key Takeaways:

    • Because Wohl had no foundation to make state of mind opinions, they constitute inadmissible witness testimony.
    • Wohl summarizes and opines over various elements of the Plans without explaining how his experience yields his conclusions and without citing sufficient evidence to substantiate his opinions. Because the Court’s gatekeeping function “requires more than simply ‘taking the expert’s word for it,’ ” the opinions and conclusions about the Plans in the Wohl Report are not sufficiently reliable to be admissible.
    • Rule 704 of the Federal Rules of Evidence permits expert witnesses to testify as to the ultimate issue in an action, but it does not authorize those opinions to be legal conclusions that will determine the outcome of the case. Wohl Report contains inadmissible legal conclusions about what remedies Wohl believes are available and adequate in this case.

    Because the Report is based on unsupported opinions, inappropriate state
    of mind opinions, and legal conclusions, it is unreliable and not helpful to the Court.

    Case Details:

    Case Caption: Stone Et Al V. Signode Industrial Group Llc Et Al
    Docket Number: 1:17cv5360
    Court: United States District Court, Illinois Northern
    Order Date: September 30, 2024
  • 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.

    Held

    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