When Vanguard gets hit, you know it’s going to get bad. The 401(k) litigation gut-check rolls on.
Bloomberg reports on a late December filing of a proposed class action suit of Anthem Inc. workers who accuse the Indiana-based health insurer of “loading its 401(k) plan with high-fee mutual funds and paying excessive fees to the Vanguard entities that service the plan.”
“The workers fault Anthem for not using the plan’s large size—allegedly more than $5.1 billion in assets—to secure lower fees,” the news service says. “They accuse Anthem of selecting high-priced share classes of mutual funds over the lower-cost share classes of identical mutual funds that are ‘readily available’ to plans of this size. They also challenge Anthem’s failure to investigate and offer non-mutual fund investments such as collective trusts and separately managed accounts prior to 2013.”
Bloomberg points to the fact that the lawsuit is noteworthy “because it takes issue with fees paid to Vanguard, which is not named as a defendant in the suit. Many lawsuits challenging excessive 401(k) fees point to Vanguard funds as examples of lower-cost alternatives that defendant plan fiduciaries could have offered.”
The filing caps a busy year for the St. Louis-based law firm of Schlichter Bogard & Denton, LLP., which is acting for the plaintiffs. The firm borught successful action recently against Boeing, Ameriprise Financial, Lockheed Martin, RJ Reynolds and successfully argued before the Supreme Court in Tibble v. Edison International.
In December, the firm brought suit against third-party human resources provider Insperity, and the 50,000 participants in its plan.