Defendants are accused of failing to use the lowest cost share class for many of the funds in the plan and failing to consider CITs and index funds as lower-cost alternatives.
Tag: retirement plan fees
McKinsey & Co. and an RIA it owned were accused of ERISA violations that included prohibited transactions.
The lawsuit challenges fees for recordkeeping, target-date funds and stable value funds, as well as fees paid to service providers to the health care system's 403(b) plan.
The firm was also charged with mutual fund share class violations.
Though similar to other lawsuits, arguments about excessive recordkeeping fees are featured early and prominently in the complaint and strongly criticize the recordkeeper, even though it is not a defendant in the case.
The lawsuit also accuses plan fiduciaries of failing to monitor total plan costs.
The lawsuit argues that while the TDFs in the plan are CITs, they are private label CITs with much higher expense ratios than the typical CITs offered by JPMorgan.
The complaint calls out the warehouse club's use of "more costly ‘actively managed funds’ rather than ‘index funds’ that offered equal or better performance at substantially lower cost."
The agreement also calls for the university to issue an RFP for recordkeeping services and engage an independent consultant to review investments, among other things.
In other ways, the excessive fee lawsuit is identical to others filed by law firm Capozzi Adler.
In addition, it is waiving distribution and loan origination fees for COVID-19-affected participants and CARES Act-related plan amendment fees for employers through August.
The plan's investment adviser is also named as a defendant, accused of helping select and retain high-cost, poorly performing funds.
The lawsuit almost completely mirrors allegations in complaints recently filed by the same law firm.
The plaintiffs sued for failing to seek competitive bids for recordkeeping, but admitted to not knowing the amount Trader Joe’s paid in recordkeeping fees.
The lawsuit alleges the defendants did not try to reduce the plan’s expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the plan to ensure it was prudent.
The firms will credit back all recordkeeper fees on loans and distributions below $10,000.
At one point, the plaintiff was proposing a defendant class of all sponsors of smaller 401(k) plans that entered into program agreements with Nationwide through its Retirement Flexible Advantage Retirement Plans Program.
Small 401(k) plans have larger costs than large 401(k) plans, but even plans with the same total assets can have different costs, an analysis from the 401k Averages Book shows.
The lawsuit says for at least 18 of the 27 mutual fund share classes available within The Vail Corporation plan, the same issuer offered a different share class from that selected by the plan that charged lower fees, and consistently achieved higher returns.
A federal judge found Voya is a fiduciary with respect to the 404a-5 participant fee disclosures it provides for the retirement plan in which the plaintiff participates.