A participant in a Mitsubishi Chemical America 401(k) plan has sued the company and plan fiduciaries alleging several ERISA violations.
"The plan offered and maintained higher cost share classes when identical lower cost class shares of the same mutual funds were available," said the complaint filed July 19 in a U.S. District Court in New York. "This resulted in the participants paying additional unnecessary operating expenses with no value to the participants and resulting in a loss of compounded returns."
The plaintiff also accused plan executives of "failing to appropriately select and monitor the Plan's stable value fund," in the case of Humphries vs. Mitsubishi Chemical America Inc. et al.
"Substantially similar products were available from other providers that would have provided far higher returns to the plan participants," said the lawsuit, which is seeking class-action status. The lawsuit affects participants and beneficiaries for the six years prior to the filing of the complaint through the date of judgment, the lawsuit said.
"Had defendants monitored and evaluated the returns on the plan's stable value fund, they would have realized that the plan's stable value fund was an underperforming fund," the lawsuit said.
And because defendants failed to monitor fees and expenses, "the plan kicked back payments to record keepers and other non-parties from the retirement savings of Mitsubishi Chemical's employees in excessive amounts," the lawsuit said.
A company representative could not be reached for comment.
The Mitsubishi Chemical America Employees' Savings Plan, New York, had $700.4 million in assets as of Dec. 31, 2021, according to the latest Form 5500.
