Participants of 401(k) plans sponsored by subsidiaries of AAA are suing the motor club federation's affiliates for allegedly making imprudent decisions when managing their retirement plans, thereby costing plan participants millions of dollars, in violation of ERISA.
The complaint, filed Tuesday in federal court in Asheville, N.C., by lead plaintiffs Wes Johnson and Tamekia Bottoms on behalf of participants in the AAA Carolinas Savings & Investment Plan and its successor, the Auto Club Group Tax Deferred Savings Plan, argues that defendants maintained "excessively expensive funds when superior alternatives existed," and failed "to properly monitor" its advisers and record keeper "allowing them to overcharge the plan with fees."
The defendants named in the suit are Carolina Motor Club (doing business as AAA Carolinas), Auto Club Insurance Association, Auto Club Group, and individuals David Parsons, Tommy Burton, Shawn Cherry, Carmen Mabe, Christina Johnson and Colin Campbell.
Auto Club Group and AAA Carolinas announced their merger in January 2020.
The complaint also contends that the defendants also cost participants money by never putting Wells Fargo's record-keeping contract up for rebid and allowing investment advisers Captrust Financial Advisors and Wells Fargo to charge the plan "excessive fees and compensation mechanisms, much higher than those warranted by the amount of work these service providers were completing."
Although Captrust and Wells Fargo are cited in the suit, they are not named as defendants "because AAA Carolinas, ACG and ACIA remain responsible for the overall selection and monitoring of all service providers."
The plaintiffs are demanding a trial by jury.
Andrew L. Fitzgerald, founding partner of the law firm Fitzgerald Litigation who's representing the plaintiffs, and Jeanette C. McGee, a spokeswoman for AAA, could not be immediately reached for additional information.