When you’re big enough, you are a target for a 401(k)lawsuit. The American National Red Cross has become another target for its 401(k) plan.
The lawsuit says the American Red Cross breached their fiduciary duties by (1) failing to review the plan’s investment portfolio with due care to ensure that each investment option was prudent, in terms of cost; (2) maintaining certain funds in the plan even though cheaper options were available; and (3) failing to control the plan’s recordkeeping costs.
The participant fees in the Red Cross plan ranged from $126.89 in 2015 to $207.67 in 2019., while similarly sized plans charged $40 a head.
The lawsuit claims that the plan has engaged in a rebranding process in which it contracts with providers of collective investment trusts (CIT)s to offer each provider’s CIT bearing the Red Cross name with the only difference being an additional cost.