Participants seeking to certify a class action lawsuit on
behalf of three Ford Motor Company retirement plans say Xerox HR Solutions
permitted excessive fees to be assessed on participant accounts, in violation
of the ERISA fiduciary duty.
The text of the complaint shows the three Ford Motor Company’s
retirement plans are fairly standard in their construction—with an employer
contribution-only component tied to a traditional plan for salaried employees
and another specifically designed for hourly employees—utilizing a master trust
to permit the commingling of assets for investment and administrative purposes.
The master trust, in turn, provides for several individual
investment options, and the Ford plans give individual participants the ability
to choose among various investment options. As of December 31, 2015, the net
assets in the trust totaled $13.94 billion, with the vast majority of the money
allocated to the plans permitting employee contributions.
The defendant Xerox provides platform and recordkeeping
services to the master trust for the administration of the Ford plans,
plaintiffs explain. Financial Engines Inc. (FE), not actually named as a defendant but factoring significantly into the complaint, is
described as providing optional advisory services that participants
can access if they chose—an arrangement that is not viewed as inherently
problematic by plaintiffs.
“FE and Xerox HR were not content, however, with merely
providing participants with access to FE’s services,” the compliant states. “Xerox
HR wanted a piece of FE’s action, and saw an opportunity to take a percentage
of the account of every participant choosing to use FE’s services, in addition
to the fees Xerox HR was collecting for recordkeeping.”
NEXT: Details from the
text of the complaint