A former participant in a 401(k) plan run by Clean Harbors Environmental Services Inc. sued the company and plan fiduciaries alleging ERISA violations in the selection and retention of certain investments as well as for the fees charged for investments.
"At all relevant times, the plan's investment fees, specifically its share classes and its stable value fund offerings, were objectively unreasonable and excessive when compared with other materially identical investment options offered by other sponsors that had similar numbers of plan participants," said the complaint filed April 10 in a U.S. District Court in Boston.
The participant is seeking class-action status, arguing that the ERISA violations started in April 9, 2016.
"During the entirety of the class period, (the) defendants did not conduct an impartial and objectively reasonable review of the plan's investments on a quarterly basis (and) did not identify the prudent share classes available to the plan," said the complaint in Kruzell vs. Clean Harbors Environmental Services Inc.
The complaint added that fiduciaries "did not transfer the plan's investments into this prudent share class at the earliest opportunity."
A company representative did not respond to a request for comment.
In addition to criticizing the use of certain allegedly expensive mutual fund share classes, the plaintiff complained about the plan's stable value fund strategy.
"Clean Harbors did not have a viable methodology for monitoring the costs of stable value funds during the class period," the lawsuit said.
Fact sheets showing costs for stable value funds other than the ones the fiduciaries chose "were readily available had Clean Harbors exercised a minimal amount of due diligence," the lawsuit said.
Clean Harbor Savings and Retirement Plan, Norwell, Mass., had $814 million in assets as of Dec. 31, 2020, according to the latest Form 5500.
