The suit against the Boston-based investment company charges that it assessed plan participants expenses that “were, or are, unreasonable and/or not incurred solely for the benefit of plan participants,” according to a Reuters news report. Fidelity is trustee and recordkeeper for the Deere plan.
The plaintiffs argue that administrative fees and expenses can depress plan returns and “even seemingly small reductions in a participant’s return in one year may substantially impair his or her accumulated savings at retirement.”
According to Reuters, the suit also charges that Deere and Fidelity were involved in a revenue sharing arrangement under which Fidelity shared with the customer some of the fees. The Deere employees said they were not told about the setup.
The plaintiffs have asked a federal judge in the US District Court for the Western District of Wisconsin to certify the suit as a class action so it can also represent thousands of other participants in the farm equipment maker’s 401(k) plan.
Spokesman Vin Loporchio of Fidelity told Reuters: “We disagree with many of the factual and legal assertions in the complaint and we intend to defend against the suit vigorously.”
This suit comes about two months after a series of lawsuits were filed against large plan sponsors alleging a variety of breaches of fiduciary duties and prohibited transactions relating to fees paid by 401(k) plans; the lawsuits say such breaches occurred because the plans and participants were subjected to excessive fees and expenses (See Fee for All).