Nestle USA Class-Action Suit Over Management of 401(k) Plans
Nestle USA is facing a class-action suit regarding its 401(k) plans. According to the complaint, the company’s record-keeping and administrative costs are more than twice as expensive as what the nearly $4.3B plan could have negotiated. In addition, the managed accounts service provided by Voya also had steeper fees than similar services available from companies such as Betterment, Vanguard, and Charles Schwab.
Lawsuit States Company Didn’t Negotiate Appropriate Fee Rates
The lawsuit states that the plan had substantial bargaining power regarding the fees and expenses charged against the participant’s investments. But, added that the company did not sufficiently strive to reduce the plan’s costs or exercise appropriate judgment to monitor each investment option to guarantee it was a wise choice.
Based on the records, the Nestle Plan between 2014 and 2018 had an average per-participant record-keeping/administration fee of $60. Other comparably-sized 401(k)s have fees of nearly $28 or less.
401(k) Plans In the Spotlight this Year
This case is one of many filed this year against retirement plan sponsors, with plaintiffs’ law firms attempting to cash in on the success achieved by firms like Schlichter Bogard & Denton. Although mutual fund fees are a common theme in several recently filed suits, other lawsuits have similarly focused on managed accounts services. In all these cases, the plaintiffs’ have the right to explore the case, since companies in charge of handling retirement funds for employees have a legal obligation to make the best choice for the management and investment of funds in accordance with the objectives of the employees.
Dimond Kaplan & Rothstein Can Help Recover Retirement Plan Losses
Our lawyers are known for our successes on behalf of clients who have been wronged through mismanagement of investments by brokers and fund managers related to managed 401(k) plans. If you think you have a case, we highly recommend you speak with an experienced attorney who can help you evaluate your rights and options.
Contact an Experienced Dimond Kaplan & Rothstein Lawyer
For a FREE case evaluation, contact DKR today for more information about how to recover funds invested in mismanaged 401(k), 403(b) and other retirement savings plans.
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