Challenging Plan Fiduciaries: Examining A New Class Action Case



Were better investment options available? Why were the record-keeping fees so high? These are among the questions behind a new 401(k) class-action case challenging a Coca-Cola Bottlers’ Association—and the plan fiduciaries.

Alleged ERISA Violations in 401(K) Retirement Plan Management

 As Investment News reports:

 In the new class-action case, law firm Foulston Siefkin alleges that the bottlers’ association and plan fiduciaries ran afoul of the Employee Retirement Income Security Act by failing to opt for the lowest-cost mutual fund share classes available, as well as collective investment trusts. The case also cites allegedly excessive record-keeping fees paid to Wells Fargo that varied from $49 to $109 per participant between 2015 and 2019.

 The complaint against the Coca Cola Bottlers Association and the fiduciaries of its 401(k) retirement plan has been filed in U.S. District Court in Kansas City, Kansas. It is brought by a former employee of one of the 65 independent bottlers in the Coca-Cola Bottler’s Association. Under question is the management of the Association’s 401(k) Retirement Savings Plan.

Specifically, the complaint, as reported by Pensions & Investments, says that defendants:

 Could have leveraged the plan’s assets to qualify for lower-cost versions of the same investments, chosen less costly and equally or better-performing investment options for the plan….

  • Should have used the plan’s size to reduce record-keeping fees….
  • Failed to properly monitor the plan’s investment options and offer substantially similar alternative options that cost substantially less and performed better.

Experts have predicted that litigation related to retirement plan fees and investments will continue to be on the rise. Catch up on this trend and review the guidance here.

Know the Difference: ERISA Bonds and Fiduciary Liability Insurance

It is  critically important for plan sponsors to understand the difference between ERISA Fidelity Bonds and Fiduciary Liability coverage.

Rules and standards for the management of private sector employee benefit plans are spelled out in the Employee Retirement Income Security Act (ERISA) and administered by the U.S. Department of Labor (DOL). Specifically, the DOL requires an ERISA fidelity bond to “protect the plan….”  Notice: the ERISA fidelity bond  is for the plan—not the plan sponsor. As a fiduciary, that means your personal assets are vulnerable in the event of a lawsuit. Fiduciary liability coverage can protect you and your assets from personal liability.

With an affordable ERISA bond package that includes up to $1,000,000 of fiduciary liability insurance, Colonial Surety Company offers plan sponsors a comprehensive solution. Our 2 or 3-year ERISA bond packages provide the greatest overall savings and protection. With a package, you can add both fiduciary liability and cyber liability insurance. Colonial even includes extended coverage to ensure your ERISA bond remains US Department of Labor compliant.

At Colonial, we make obtaining comprehensive coverage easy for plan sponsors: Choose Your ERISA Bond Package Now!

Fiduciary Responsibilities: Are You Clear?

 There’s never a bad time to brush up on your fiduciary responsibilities! Here is a quick refresh from the DOL:

 Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf of participants in a retirement plan and their beneficiaries. These responsibilities include:

 Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them;

  • Carrying out their duties prudently;
  • Following the plan documents (unless inconsistent with ERISA);
  • Diversifying plan investments; and
  • Paying only reasonable plan expenses.


Don’t forget: the ERISA Bond the DOL requires for the retirement plan can only be issued by a U.S. Treasury listed business, such as Colonial Surety Company, a national leader in the field. When you select an affordable package from Colonial, you receive a comprehensive, three point solution for the times at hand:


  1. The ERISA bond required to protect the assets of the retirement plan from theft;
  2. Fiduciary Liability coverage to protect you and your assets from personal liability; and,
  3. Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach.

 Colonial Surety Company provides user-friendly, digital and direct service. You can easily and quickly purchase your bonds and related insurance coverage online—and instantly print or e-file them from your desktop—or anywhere.

 Obtain Your Complete ERISA Bond Package Today!

 Colonial Surety Company is in business all across the USA. We are rated A Excellent” by A.M. Best Company and  U.S. Treasury listed.