It’s just not a good look.
Gucci America Inc. is the latest company to be sued over the fees associated with its retirement plan.
The lawsuit challenges Gucci’s relationship with its 401k service provider, Transamerica Retirement Solutions, Bloomberg BNA reports.
“Gucci allowed Transamerica to fill its $96.5 million plan with expensive, proprietary funds that earned fees for Transamerica at the expense of plan participants, according to the complaint filed Sept. 15 in a federal court in New Jersey,” the news service notes.
“Gucci also failed to rein in the revenue-sharing payments that Transamerica received in connection with the plan, the lawsuit alleges. In targeting a 401k plan of modest size, this case is the latest example of how litigation over retirement plan fees is trickling down from jumbo plans to those with substantially fewer assets.”
The suit alleges that the defendants were fiduciaries under ERISA; breached their fiduciary duties by failing to fully disclose to participants the expenses and risks of the plan’s investment options; breached their fiduciary duties by allowing unreasonable expenses to be charged to participants for administration of the plan; and, breached their fiduciary duties by selecting and retaining opaque, high-cost, and poor-performing investments instead of other available and more prudent alternative investments.
The lawsuit was filed by Shepherd Finkelman Miller & Shah LLP, and Law Offices of Sahag Majarian, in the U.S. District Court for the District of New Jersey.
The news comes on the heels of a lawsuit filed against Kansas City-based DST Systems Inc. claiming the company allowed a money manager to put concentrated positions of its employees’ retirement assets in one company’s stock.
Shares of Valeant Pharmaceuticals International Inc. fell from more than $260 a share to less than $15 a share in 15 months, and the concentrated investments of DST right along with it.
The lawsuit said DST employees saw nearly $400 million disappear from their retirement accounts.