Automotive Group Allegedly Lost 9% of 401(k) Assets During Recordkeeper Switch

An employee of Rick Case Enterprises Inc. and a participant in the company’s 401(k) plan filed a complaint accusing the Florida-based automotive group of mismanaging its employee retirement plan, resulting in unexplained losses.

The complaint, Hebert v. Rick Case Enterprises Inc., et al., filed in the U.S. District Court for the Southern District of Florida, alleges the company breached its fiduciary duties under the Employee Retirement Income Security Act by mishandling a switch in recordkeepers, resulting in unexplained losses in plan assets.

Retirement Assets Allegedly Vanished

According to the complaint, Rick Case Enterprises moved its 401(k) plan to Principal Financial Group from Empower Retirement in late 2022. According to plaintiff Romeo Hebert, employees were placed in a blackout period during the transfer—unable to access or change their accounts.

When Principal received the funds in early January 2023, Hebert alleges that participant account balances were approximately 9% lower than before the transfer. The complaint stated that Hebert himself was fully invested in a MassMutual stable value fund, designed to guarantee principal, making any reduction highly irregular.

Neither recordkeeper is named in the complaint. Empower did not respond to a request for comment. Principal declined to comment.

Participants reportedly received conflicting information, with some communications suggesting that a “market value adjustment fee” had been implemented, while others indicated that missing funds would be returned. However, no documentation or reimbursements were subsequently provided.

Investments Mishandled After Transfer

According to the complaint, Rick Case Enterprises previously told employees their funds would be placed in age-based target-date funds—the plan’s designated qualified default investment alternative—after the transition.

According to the lawsuit, Principal instead invested the transferred assets into a “diversified mix of mutual funds” that did not align with the plan’s stated default investment rules.

The participants allegedly did not regain access to their accounts until January 9, days after the blackout was supposed to end.

Mathews Giberson LLP represents the plaintiffs, while court documents do not list the defendants’ counsel.

The Rick Case Enterprises Inc. 401(k) Plan had more than $35 million in assets with approximately 1,400 plan participants at the end of 2024, according to the plan’s most recent Form 5500 filing.