Seven former employees of industrial holding company Marmon Holdings have filed a class action lawsuit against their former employer, alleging the company mismanaged its 401(k) plan.
The lawsuit filed Tuesday in U.S. District Court for the Northern District of Illinois against Marmon, its board of directors and its administrative pension committee alleged that the company breached its fiduciary duty by failing to review the portfolio of plan investment to ensure that each investment was prudent in terms of cost. He also criticized the company, which is owned by Berkshire Hathaway, for allegedly excessive administrative and record-keeping fees.
“Their actions were contrary to the actions of a reasonable fiduciary and cost the plan and its participants millions of dollars,” plaintiffs’ attorneys wrote in the suit.
The plaintiffs also took aim at the company’s series of target date funds, which they said performed significantly worse than target date suites available in the market.
“It was a clear breach of fiduciary duty to have created these underperforming target date funds instead of choosing from the many top performing target date suites with expected stability for each scheduled retirement date,” they wrote. said the lawyers.
A spokeswoman for Marmon vigorously disputed the allegations. “The Marmon Pension Plan is prudently managed and closely monitored with a single focus on the best interests of plan participants and beneficiaries,” she said in a statement. “Marmon uses third-party experts to assist in the selection and monitoring of plan investment options, including objectively reviewing the plan’s investment portfolio with due care to ensure that each investment option is prudent – in terms of cost and performance – given the various market trends and cycles. With the input of these experts, Marmon is also negotiating a reduction in administrative, record keeping and capital expenditure.”
The lawsuit seeks to compel Marmon and the other defendants to make up for the plan any losses resulting from their fiduciary breaches.
As of December 31, 2020, Marmon’s employee pension plan had $1.1 billion in assets, according to its latest Form 5500.