FMR LLC, the parent of Fidelity Investments, asked a U.S. District Court in Boston to dismiss a lawsuit that accuses Fidelity's own 401(k) plan of “self-dealing” to the detriment of plan participants, confirmed Vincent Loporchio, a spokesman for FMR.
FMR's response, filed Monday, said the complaint should be dismissed because “it fails to state a claim that Fidelity violated the Employee Retirement Income Security Act.” FMR's document said the plaintiff, Lori Bilewicz, identified as a former Fidelity employee and former participant in Fidelity's 401(k) plan, offers “no facts that can sustain a charge of fiduciary disloyalty.”
Ms. Bilewicz filed her lawsuit March 19 in U.S. District Court in Boston, alleging Fidelity's DC plan practiced “self-dealing at the expense of its own workers' retirement savings” from March 20, 2007, to the date the suit was filed. According her complaint, Ms. Bilewicz is seeking class-action status for her suit.
Mr. Loporchio said the company's plan had assets of $8.25 billion at year-end 2011, the latest date for which information is available.
Her complaint accused Fidelity of failing its fiduciary duties because the company offered only proprietary investment options in the company plan. “These funds were not selected and retained as the result of an impartial or prudent process,” her complaint said.
“By choosing and then retaining these proprietary investment funds as the menu of options,” Ms. Bilewicz and other Fidelity employees “enriched FMR, its subsidiaries and owners at the expense of FMR's own employees,” her complaint said.
The FMR response noted Ms. Bilewicz withdrew her entire account balance in July 2011. Between March 20, 2007, and her withdrawing her balance, she invested in 14 of 160 funds that were available.
Fidelity “is able to provide participants with a full spectrum of high-quality mutual funds,” the FMR document said. “The plan's investment lineup includes funds in many different asset classes, with a wide variety of risk profiles, and a range of fee structures, including numerous funds with fees far below the level that (Ms. Bilewicz) acknowledges to be appropriate.”
Because FMR offers to its participants “a broad, diverse investment lineup of Fidelity funds … and because the factual allegations (by Ms. Bilewicz) do not give rise to any plausible inference of disloyal conduct,” the FMR document asked her complaint be dismissed.