Former participants in the Amway Retirement Savings Plan have filed a lawsuit accusing fiduciaries of breaching their duties under the Employee Retirement Income Security Act (ERISA) by failing to monitor appropriate investment costs.
Plaintiffs claim that at all times during the class period, which runs from November 9, 2014, through the date of judgement, Amway’s retirement savings plan had at least $1.1 billion in assets under management, qualifying it as a jumbo plan in the defined contribution (DC) space. As a jumbo plan, plaintiffs say, the plan had substantial bargaining power regarding investment fees and expenses. Instead, plaintiffs claim the defendants—including various retirement plan committees and Alticor Inc., the corporate parent of Amway—did not attempt to reduce the plan’s expenses or exercise appropriate judgement to scrutinize each investment option within the plan to ensure it was prudent.
Additionally, the complaint says defendants continued to offer certain funds in the plan despite the availability of identical or similar investment options with lower costs and/or better performance histories and failed to control the plan’s recordkeeping costs by using revenue sharing.
The complaint further states that the company, acting through its board of directors, had a fiduciary duty in monitoring and supervising the plan’s investment committee.
The lawsuit seeks to determine that defendants had breached their fiduciary duty under ERISA, to make good on all losses to the plan resulting from the fiduciary breach during the class period, and for actual damages in the amount of losses to be allocated to participants’ individual accounts. The complaint also requests that an independent fiduciary or fiduciaries be added to run the plan in place of any fiduciaries deemed to have breached their duties.
In a statement to PLANADVISER, Amway said, “Amway has always been fair, generous, and competitive in its delivery of retirement benefits. We stand by the management of the Retirement Savings Plan we offer, and we will vigorously defend against these baseless accusations.”