Yet another high-fee/fiduciary-fail lawsuit has been filed in the ongoing tort-lawyer Gold Rush involving 401(k)s.
This time, Fujitsu Technology & Business of America Inc. stands accused of breaching its fiduciary duties by designing and administering what plaintiffs claim in one of the most expensive large 401(k) plans in the country.
The reason?
In a departure from similar ERISA class action suits filed previously, the complaint “says that the fiduciaries breached their duties by imprudently designing and implementing the plan’s target-date funds,” according to Bloomberg BNA.
Fujitsu’s failure to monitor the plan administrative fees resulted in millions of dollars charged to participants, according to the complaint, filed June 30 in the U.S. District Court for the Northern District of California.
As of 2014, the Fujitsu plan had approximately $1.3 billion in assets and 9,891 participants, and it had incurred at least $7 million per year in excess fees when compared with the average for plans of similar size, the news service notes.
“The complaint says that Fujitsu transferred the large majority of the plan’s assets into a set of custom target-date funds designed by the investment adviser firm Shepherd Kaplan LLC. According to the complaint, the firm had no public track record of managing or designing target-date funds and used a ‘fundamentally flawed’ asset allocation.”
Three-quarters of the Fujitsu target-date funds underperformed compared with their benchmark indices, costing participants tens of millions of dollars, the complaint alleges.