Fidelity Investments just reached a settlement with former plan participants in the firm’s 401(k) plan, who accused plan fiduciaries of violating ERISA laws. Filed on June 18 in U.S. District Court in Boston, the plaintiffs allege the defendants failed to properly manage the plan in a prudent and loyal manner. Plan participants argued Fidelity’s plan was full of proprietary investments and fiduciaries did not bother to find out if other investments would be better performing and less expensive.
Furthermore, providing several proprietary products was a “failure to engage in a meaningful process monitoring the plan’s investments options to ensure they remained prudent.” the compliant stated.
The U.S. District Judge William G. Young dismissed a few claims, but let others proceed, writing that Fidelity Investments “breached its duty of prudence by failing to monitor its mutual fund investments and by failing to monitor record-keeping expenses.”
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