A former participant in a Kellogg Co. 401(k) plan has sued the company and plan fiduciaries, alleging ERISA violations due to mismanagement.
"Defendants breached their duty of prudence to the plan, plaintiff, and all other plan participants, by authorizing the plan to pay objectively unreasonable fees for recordkeeping services," said the lawsuit filed June 28 in a U.S. District Court in Kalamazoo, Mich.
"The plan's recordkeeping fees were objectively unreasonable and excessive when compared with other comparable 401(k) plans offered by other sponsors that had similar numbers of plan participants," said the complaint in the case of Fleming vs. Kellogg Co. et al. The plaintiff is seeking class-action status.
"Defendants failed to take advantage of the plan's size to timely negotiate lower fees from its existing recordkeepers," the lawsuit said.
It also accused the defendants of failing to "timely negotiate" lower managed account fees, saying they could have chosen another managed-account provider "if it had solicited competitive bids for the same services."
A company representative did not respond to a request for comment.
The Kellogg Company Savings and Investment Plan, Battle Creek, Mich., had $2.05 billion in assets as of Dec. 31, according its latest 11-K filing.
