Suit Says Fiduciaries of $700 Million 401(k) Fell Short

Suit Says Fiduciaries of $700 Million 401(k) Fell Short




A new excessive fee suit challenges the imprudent selection of share classes, the poor selection of a stable value offering AND exorbitant recordkeeping fees.

Here we have one participant-plaintiff Robert  Humphries suing based on the actions (or lack thereof) of the fiduciaries of the $700 million (4,600 participant) Mitsubishi Chemical America Employees’ Savings Plan, specifically the plan sponsor entity itself (Mitsubishi Chemical America, Inc.), “each member of the  Board of Directors of Mitsubishi Chemical, the Plan’s Administrative Committee,” and even “Kitty  Antwine, who was the signatory to the Plan’s annual Form 5500 filed under sections 104 and 4065 of  ERISA and sections 6057(b) and 6058(a) of the Internal Revenue Code”—as well as “John/Jane Does 1-10”—unnamed, but allegedly involved in the “management, operation and administration of the Plan.”[1]

‘Basic’ Claiming

More specifically, the suit (Humphries v. Mitsubishi Chem. Am., Inc., S.D.N.Y., No. 1:23-cv-06214, complaint 7/19/23) alleges that “the fiduciaries to the Plan failed to meet their fiduciary obligations in several basic ways”:

  • First by offering and maintaining “higher cost share classes when identical lower cost class shares of the same mutual funds were available,” which the suit says “is one of the most common and well-known example of an imprudent investment decision.” 
  • Secondly, the suit claims that the defendants “wasted participants’ money by failing to appropriately select and monitor the Plan’s stable value fund” when “substantially similar products were available from other providers that would have provided far higher returns to the Plan participants.” 
  • Thirdly, the suit claims that the defendants failed to monitor the Plan’s fees and expenses, and that “as a result, the Plan kicked back payments to recordkeepers and other non-parties from the retirement savings of Mitsubishi Chemical’s employees in excessive amounts.”

The suit takes pains to point out that “plaintiff is not merely second-guessing Defendants’ investment decisions with the benefit of hindsight. The information Defendants needed, to make informed and prudent decisions, was readily available to them when the decisions were made.”


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