Former employees of medical contract research firm Pharmaceutical Product Development have sued the company and 401(k) plan fiduciaries alleging violations of ERISA, ranging from charging high investment option fees to failing to seek lower price alternatives to existing investments.
"The plan had substantial bargaining power regarding the fees and expenses that were charged against participants' investments," said the complaint filed April 15 in a U.S. District Court in Wilmington, N.C.
Plaintiffs criticized defendants for "failing to 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 Kendall et al. vs. Pharmaceutical Product Development LLC et al. The company had been privately held, but it went public in February and is now called PPD Inc. It is based in Wilmington, N.C.
The plaintiffs, who are seeking class-action status, alleged that the plan fiduciaries kept certain investment options "despite the availability of identical or similar investment options with lower costs and/or better performance histories."
They also accused the fiduciaries of failing to consider alternatives to mutual funds such as collective investment trusts or separate accounts "despite their lower fees."
A company representative did not respond to a request for comment.
The Pharmaceutical Product Development LLC Retirement Savings Plan had assets of $721.6 million as of Dec. 31, 2018, according to the latest Form 5500.
