Two former employees of Quanta Services Inc. have sued the company and the fiduciaries of its 401(k) plan, saying they mismanaged the plan in violation of ERISA.
The defendants "selected, retained or otherwise ratified high-cost and poorly-performing investments instead of offering more prudent alternative investments that were readily available," said the complaint filed Monday in a U.S. District Court in Houston.
The lawsuit criticized plan executives for keeping an actively managed target-date series, Fidelity Freedom, alleging high fees and poor performance compared to several other target-date series both actively managed and index-based. Fidelity Investments isn't a defendant.
Plan executives "neglected to undertake any analysis of the active suite against appropriate peers," said the complaint in the case of Laliberte et al. vs. Quanta Services Inc. et al
Because the defendants didn't replace the Fidelity target-date series, they violated their fiduciary duties under ERISA, said the lawsuit, which seeks class-action status.
A company representative did not respond to a request for comment.
The Quanta Services Inc. 401(k) Savings Plan, Houston, had assets of $1.2 billion as of Dec. 31, 2020, according to the latest Form 5500.