Participants in a 401(k) plan offered by Wesco Distribution Inc., Pittsburgh, Pa., have sued the company and plan fiduciaries alleging violations of their ERISA duties.
They alleged the plan executives allowed "unreasonable and excessive" record-keeping fees, according to the complaint filed March 26 in U.S. District Court in Pittsburgh in the case of Mator et al. vs. Wesco Distribution Inc. et al.
They accused the defendants of "failing to take standard and customary actions to understand the market" for record-keeping services "in order to monitor for reasonableness" of the fees that were charged.
The lawsuit, which seeks class-action status, said the ERISA violations took place between 2015 and 2019 causing "lower net returns, eating into and substantially reducing plaintiffs' and plan participants' retirement savings." Wells Fargo was the record keeper during this period; it is not a defendant.
The Wesco defendants "did not regularly and/or prudently assess" the record-keeping fees, the complaint said. They "did not engage in any regular and/or reasonable examination and competitive comparison" of the fees charged by other record keepers for the same services.
The plaintiffs also alleged that plan executives failed to select lower-cost mutual shares when they were available vs. the same funds in the plan lineup.
A company representative did not respond to a request for comment.
The Wesco Distribution Inc. Retirement Savings Plan had assets of $762 million as of Dec. 31, 2019, according to the latest Form 5500.