A U.S. District Court judge in New York rejected most arguments by Omnicom Group to dismiss an ERISA complaint by current and former participants in a company 401(k) plan against the company and fiduciaries.
The complaint, in the case of In re Omnicom Group Inc. ERISA Litigation, alleges, among other things, excessive record-keeping fees and high fees for poorly performing investment options. The case represents the consolidation of two similar lawsuits against Omnicom and its fiduciaries filed in May 2020 and July 2020.
The plaintiffs argued that Omnicom should have used its plan's asset size to obtain lower fees. "Whether Omnicom actually would have been able to secure a lower rate ... is a matter reserved for later," wrote U.S. District Judge Colleen McMahon on Monday, rejecting Omnicom's motion to dismiss on this allegation.
"Courts have denied motions to dismiss ERISA excessive fee claims where, 'Plaintiffs allege that defendants overpaid management fees, [and] the plan failed to use its size and presumed negotiating power to reduce costs,'" the judge wrote in quoting another ERISA ruling.