January 10, 2014 (PLANSPONSOR.com) – Another participant in Fidelity Investments’ own retirement plan has brought a lawsuit saying participants paid excessive fees.
latest lawsuit focuses on Fidelity’s treatment of revenue sharing payments,
arguing “Defendants caused the Plan to forego tens of millions of dollars in
revenue-sharing rebates that Fidelity kept for itself.” According to the
complaint, in 2012, the Fidelity plan had approximately 71% of its investment
assets in actively-managed Fidelity mutual funds. All the funds are managed by
an affiliate of the recordkeeper. Instead of negotiating a revenue-sharing
recapture arrangement favorable towards participants, plan fiduciaries arranged
with Fidelity Operations and Fidelity Management to keep all revenue-sharing
for Fidelity, the complaint contends, saying this arrangement cost the Fidelity
Plan and its participants approximately $15 million a year for the years
class action is brought on behalf of participants in the plan from January 8, 2008
through the present, and accuses FMR, LLC and its retirement plan committee of
violating their duties under the Employee Retirement Income Security Act
(ERISA) to act solely in the interests of the plan and its participants. ERISA also demands that plan fiduciaries defray
the expenses of plan administration and be prudent with plan assets.
suit seeks an order compelling the disgorgement of all revenue-sharing payments
that it says should have been rebated to the plan and instead were received,
directly or indirectly, by FMR subsidiaries and affiliates, and an order
compelling the defendants to restore all losses to the plan arising from their
alleged violations of ERISA, plus opportunity losses to compensate for the plan’s
lack of access to the monies during the class period.
previous lawsuit filed against Fidelity accuses it of self-dealing at the
expense of its own workers’ retirement savings. The complaint brought by an FMR
LLC Profit Sharing Plan participant on behalf of all participants says the
history of the plan’s investment offerings demonstrates rampant conflicts of
interest (see “Fidelity Accused of Self-Dealing in New Lawsuit”).
The complaint filed
in the new case, Yeaw v. FMR, LLC, is