Former employees of B. Braun Medical Inc. have sued the company and its fiduciaries alleging a series of ERISA violations in the management of the company's 401(k) plan.
Braun's retirement plan "had substantial bargaining power regarding the fees and expenses that were charged against participants' investments," said the complaint filed Wednesday in U.S. District Court in Allentown, Pa.
"Defendants, however, did not try to reduce the plan's expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the plan to ensure it was prudent," said the complaint in the case of Nunez et al. vs. B. Braun Medical Inc. et al.
The complaint, which seeks class-action status, faulted the plan executives for retaining certain actively managed funds that "charged grossly excessive fees compared with comparable or superior alternatives."
The complaint also criticized plan executives for allegedly failing to use lower-cost shares of several investment products in the plan lineup.
"There is no good-faith explanation for utilizing high-cost share classes when lower-cost share classes are available for the exact same investment," the complaint said. "The plan did not receive any additional services or benefits based on its use of more expensive share classes; the only consequence was higher costs for plan participants."
Allison Longenhagen, a spokeswoman for B. Braun Medical, wrote in an email that the company doesn't comment on ongoing litigation.
B. Braun Medical Inc. Savings Plan, Bethlehem, Pa., had $572 million in assets as of Dec. 31, 2018, according to the latest Form 5500.