Participants in a Delta Air Lines Inc. 401(k) plan have sued plan and corporate executives alleging violation of fiduciary duties by offering a plan lineup with unnecessarily high fees for investments.
The plan “has the ability to demand and obtain lower-cost investment options,” said the lawsuit filed Tuesday, criticizing the management of the Delta Family Care Savings Plan. “The defendants, however, did not provide participants in the plan with the lowest cost investment options that were easily available to them.”
The lawsuit, Johnson et al. vs. Delta Air Line Inc. et al., seeks class-action status. It was filed in U.S. District Court in Wilmington, Del. Although Delta's headquarters is in Atlanta, the company is incorporated in Delaware. The complaint noted that the plan is administered in Delaware. The plan had $8.1 billion in assets as of Dec. 31, according to its latest Form 5500 filing with the Department of Labor.
The lawsuit also alleged that the defendants “allowed the plan to be charged costs and fees for administrative services like record keeping, which were far in excess of what the plan should have paid.”
“This complaint is without merit," a Delta spokesman said. "Our plan investment options and fees undergo regular review and the best interest of our employees and plan participants are the main focus of this work. We offer a well-diversified, low-fee investment lineup in the plans. We will defend this litigation vigorously.”