Excessive Fee Suits Target CIT Choice Issues


Filed in the U.S. District Court for the Northern District of Illinois, eight former workers of Astella US LLC, a drug company, are suing plan fiduciaries of the company, criticizing the plan’s size and how it gave it “substantial bargaining power to command very low investment management fees for its participants.”

Per the suit, Astellas Defendants hired Aon Hewit to initially offer investment advisory services with respect to the plan, then later expanded that responsibility with discretion over the selection, retention, and removal of said plan. This combination resulted in the removal of all plan’s mutual funds and their replacement with six collective investment trusts. The plaintiffs claim the defendants failed to create an independent investigation into the motives of Aon Hewitt collective investment trusts before placing in them into the plan.

What’s more, the plaintiffs state that “as the investment adviser of these collective investment trusts, Aon Hewitt had a direct conflict of interest between acting in the exclusive best interest of Plan participants as the Plan’s discretionary investment manager while also seeking to grow its collective investment trust business and maximize its revenue through investment advisory fees.

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