Litigation
Another multi-billion-dollar 401(k) plan has been sued for “grossly excessive” fees.
This time the target is the 16,000-participant, $2 billion plan of NCR Corporation. The plaintiffs in this case—Alan Schoenbeck, a current Plan participant, and Jorge Mirabal, a former Plan participant—claim that “over the past six years, Plan participants have paid more than $20,000,000.00 (twenty million) in administrative fees”—a sum that they allege is “nearly eight times what they should be.” Beyond that, this suit, filed in U.S. District Court for the Northern District of Georgia, claims that “the account statements that NCR provides to its Plan participants do not disclose the fees paid to third party service providers by Plan participants,” and while “the Plan’s Annual Form 5500 Department of Labor reports are supposed to identify the fees paid to third parties…they do not.”
The issue here is recordkeeping fees, both direct and indirect, paid to the plan’s recordkeeper, Fidelity. The plaintiffs[i] do some quick math and determine that, according to the plan’s annual fee disclosure, “Fidelity receives direct compensation of at least $53.00 annually from Plan participants,” whereas the plaintiffs assert that “a reasonable total fee for recordkeeping ought to be no more than $25.00 annually”—“more than double what it ought to be. But it gets much worse,” they continue.
‘Indirect’ Claims
Worse in this case (according to the plaintiffs) were indirect fees, which the suit (...
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