Three former participants in the Amway Retirement Savings Plan filed a lawsuit alleging that plan fiduciaries violated their duties under ERISA by failing to reduce plan fees and expenses.
The fiduciaries also failed to "exercise appropriate judgment to scrutinize each investment option that was offered in the plan to ensure it was prudent," said the complaint filed Monday in a U.S. District Court in Grand Rapids, Mich.
Seeking class-action status, the plaintiffs argued that fiduciaries failed to control record-keeping costs and kept certain investments in the 401(k) plan even though "identical or similar" options were available that were cheaper and/or better-performing.
The fiduciaries didn't "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 in the case of Garcia et al vs. Alticor Inc. et al. Alticor is Amway's parent company.
"Amway has always been fair, generous, and competitive in its delivery of retirement benefits," said an Amway email response. "We stand by the management of the Retirement Savings Plan we offer, and we will vigorously defend against these baseless accusations."
The Amway Retirement Savings Plan, Ada, Mich., had assets of $1.36 billion as of Dec. 31, 2019, according to the latest Form 5500.