On behalf of plan participants of the Costco 401(k) Retirement Plan, a lawsuit was filed against Costco Wholesale Corporation and related parties for allegedly mismanaging a defined contribution plan worth $15.5 million.
Filed on Tuesday in the U.S District court in Green Bay, Wisconsin, the compliant indicates that starting on June 23, 2014, the defendants allegedly violated their fiduciary responsibilities by allowing the plan to pay unreasonably high record-keeping fees, failing to make sure each investment choice was prudent, and maintaining specific funds in the plan despite availability of similar or identical investment options with track-records of lower costs and/or better performance.
“These investment options and unreasonable fees cannot be justified. Defendants’ failure to monitor and improve investment options confirms more than simply sloppy business practice,” the suit claimed “Defendants’ failures breached the fiduciary duties they owed to plaintiff, plan participants and beneficiaries. Prudent fiduciaries of 401(k) plans continuously monitor administrative fees against applicable benchmarks and peer groups to identify unreasonable and unjustifiable fees.”
Paul Secunda, a partner at the law firm Walcheske & Luzi LLC representing the plaintiffs, stated “The hope is that this class-action lawsuit against Costco will start the process of forcing employers and their record keepers to monitor their 401(k) investment options in a way that is truly in the best interests of their employees. Only then will employees … be able to retire with the adequate retirement income that they have rightfully earned.”
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