Former employees of the American National Red Cross sued the organization and its 401(k) plan fiduciaries, alleging a series of ERISA violations in the management of the plan.
They accused the fiduciaries of "failing to objectively and adequately review the plan's investment portfolio with due care to ensure that each investment option was prudent, in terms of cost," said the complaint filed Tuesday in the U.S. District Court for the District of Columbia.
They also alleged that the fiduciaries kept "certain funds in the plan despite the availability of identical or similar investment options with lower costs and/or better performance histories," according to the case of Tracy et al. vs. The American National Red Cross et al.
The plaintiffs, who are seeking class-action status, also complained that fiduciaries failed to control the plan's record-keeping costs.
"We don't believe there is any validity to the claims that the American Red Cross 401(k) plan has been mismanaged," Red Cross spokeswoman Jenelle L. Eli said in an email. "To the contrary, we believe that the Red Cross 401(k) plan has been well managed and provides a valuable benefit to our employees. We do not believe any litigation against our plan would have any merit and plan to defend vigorously."
The American Red Cross Savings Plan, Washington, had assets of $1.2 billion as of Dec. 31, 2019, according to the complaint.
