A participant in a T-Mobile USA 401(k) plan sued FMR LLC, the parent company of Fidelity investments, and several FMR affiliates alleging they violated ERISA rules through actions as the record keeper for the plan.
The participant characterized Fidelity's efforts to offer multiple mutual fund families to the 401(k) plan as requiring these fund providers to make "secret payments" to remain in the Fidelity FundsNetwork, the firm's so-called supermarket for non-proprietary products.
"Fidelity emphatically denies the allegations in this complaint," Fidelity spokesman Michael Aalto said in an email. "Fidelity fully complies with all disclosure requirements in connection with the fees that it charges."
The suit was filed Feb. 21 in U.S. District Court in Boston by Andre Wong, a participant in the T-Mobile 401(k), seeking class action status and claiming to file the suit on behalf of the plan.
Neither T-Mobile nor its plan is a named plaintiff or defendant in the case of Wong et al. vs. FMR LLC et al.
The plaintiff contends that fees charged by Fidelity to funds in the Fidelity FundsNetwork represent "indirect compensation" that Fidelity is required to disclose to defined contribution plans under terms of the Employee Retirement Income Security Act.
"Fidelity does not disclose the amount of these secret payments," the lawsuit claimed, adding that Fidelity "forbids the mutual funds from disclosing the amount of these secret payments, despite their legal obligation to do so."
