A participant in a 401(k) plan run by Gerdau Ameristeel US Inc. has sued the company and plan fiduciaries alleging ERISA violations in the plan's management.
"Defendants did not adhere to fiduciary best practices to control plan fees and expenses," said the lawsuit filed Sept. 9 in a U.S. District Court in Tampa, Fla.
"To the extent that defendants made any prudent attempt to control the plan's expenses and to ensure the expenses were not excessive, defendants employed flawed and ineffective processes," said the complaint in the case of Molla vs. Gerdau Ameristeel US Inc. et al.
The plaintiff, who is seeking class-action status, alleged that fiduciaries "failed to ensure that the fees and expenses charged to plan participants were reasonable, and that the compensation third-party service providers received from the plan for services were reasonable."
A spokesman wrote in an email that the company doesn't comment on pending litigation.
In criticizing the fees for the plan's record keeper, Fidelity Investments, the plaintiff alleged that defendants haven't conducted an RFP since 2016.
"If defendants had undertaken an RFP to compare Fidelity's costs with those of others in the marketplace, defendants would have recognized that Fidelity's compensation for recordkeeping services during the class period has been and remains unreasonable and excessive," the lawsuit said.
Fidelity isn't a defendant. The class period — the time of the alleged ERISA violations — runs from Sept. 1, 2016, to the present, the lawsuit said.
The Gerdau Ameristeel US 401(k) Retirement Plan, Tampa, Fla. had assets of $655 million as of Dec. 31, 2020, according to the latest Form 5500.
