Participants in a 401(k) plan run by Evonik Corp. have sued corporate officers and directors and investment committee members of the specialty chemicals manufacturer, alleging violations of fiduciary duty relating to plan management and investment selection.
The plaintiffs said plan officials failed "to objectively and adequately review the plan's investment portfolio with due care to ensure that each investment option was prudent," according to a Feb. 28 complaint filed in a U.S. District Court in Newark, N.J.
They also faulted plan executives for retaining certain investments "despite the availability of identical or similar investment options with lower costs and/or better performance histories," according to the complaint, Silva and Allen vs. Evonik Corp. et al.
Evonik "is confident the plan's investments and fees have been managed appropriately and intends to vigorously defend its position," company spokesman Robert Brown wrote in an email.
The plaintiffs, who are seeking class-action status, complained that plan managers should have investigated offering cheaper investment options such as passive funds vs. actively managed funds and collective investment trusts vs. mutual funds. They also wrote that plan executives "failed to prudently monitor" the investment lineup to make sure participants were being offered "the lowest-cost share class available."
The Evonik Corp. 401(k) Savings Plan, Parsippany, N.J. had assets of $959.4 million as of Dec. 31, 2018, according to the latest Form 5500.