Four former employees of DISH Network Corp. have hit their ex-employer with a class-action lawsuit claiming the satellite television company's $841 million 401(k) plan charged participants overly expensive fees.
The lawsuit filed Jan. 20 in a District Court in Colorado Springs, Colo., alleges that the company breached its fiduciary duties by failing to disclose the expenses and risk of the plan's investment options to participants, allowing unreasonable expenses to be charged to participants, and selecting and retaining high-cost and poorly preforming investments.
The plaintiffs filed the suit against the company, the company's board of directors, the retirement plan committee, and other fiduciaries of the plan.
The lawsuit took the satellite TV company to task for alleged excessive record-keeping and administrative fees charged by Fidelity Investments, claiming there were other comparable plans paying much lower fees. Fidelity is not a defendant in the suit.
"The fees paid by the plan for virtually the same package of services are much higher than those of plans with comparable, and in many cases smaller, participant counts," the lawsuit claimed.
The plaintiffs also faulted the company for choosing Fidelity's active suite of Freedom target-date funds over less costly and less risky Freedom index funds as the plan's qualified default investment alternative.
"Defendants failed to compare the active and index suites as well as all other available target-date funds and consider their respective merits and features," the lawsuit alleged.
Among other things, the plaintiffs are seeking equitable, legal or remedial relief for all losses and compensatory damages they sustained.
DISH Network officials did not respond to an email seeking comment.