Five participants in the 401(k) plan of ABB Inc., Norwalk, Conn., filed suit against the company and its trustee, Fidelity Management Trust, claiming they violated their fiduciary obligations under ERISA by charging excessive fees.
The lawsuit, filed Dec. 29 in U.S. District Court in Kansas City, Mo., claims "the fees and expenses paid by the (ABB Personal Retirement Investment and Savings Management Plan), and thus borne by plan participants … are unreasonable and excessive; not incurred solely for the benefit of the plan and their participants" and that plan administrators did not adequately disclose the fees to participants, the lawsuit said. ABB has a subsidiary located in Jefferson City, Mo. The suit seeks unspecified monetary damages. The plan had $1.47 billion in 401(k) assets as of December 2003, the latest data available, according to Money Market Directory.
Schlichter, Bogard & Denton PC, which represents the ABB participants, has also targeted at least 10 other top corporations with similar complaints since September. Those companies are: Boeing, with $23.7 billion in defined contribution assets; Lockheed Martin Corp., Bethesda, Md., with more than $14 billion in defined contribution assets; United Technologies Corp., Hartford, Conn., with nearly $14 billion in defined contribution assets; Northrop Grumman Corp., Los Angeles, with more than $11 billion in assets; Caterpillar Inc., Peoria, Ill., with $4.5 billion; General Dynamics Corp., Falls Church, Va., with $6 billion; International Paper Co., Memphis, Tenn., with $4.4 billion; Bechtel Corp., San Francisco, $3.9 billion; Exelon Corp., Chicago, with more than $3 billion; and Deere & Co., Moline, Ill, with $2 billion as of May 2005.
Vin Loporchio, a spokesman for Fidelity Investments, parent of Fidelity Management Trust, said Fidelity disagrees with the "factual and legal assertions and intends to defend vigorously" against the lawsuit. "We believe the fees charged and the compensation collected were reasonable," he said.
Ronald Kurtz, a spokesman for ABB, declined to comment.