Three former employees of Reyes Holdings LLC have sued the Rosemont, Ill., food and beverage distributor and its fiduciaries for mismanaging the company's 401(k) plan.
The plaintiffs alleged the plan charged "excessive" record-keeping fees and offered some poor-performing investment options.
"Plan fiduciaries failed to administer the plan in a prudent manner," said the complaint filed Tuesday in a U.S. District Court in Chicago.
"The plan's recordkeeping and administrative costs were excessive during the class period," said the complaint by the plaintiffs, who are seeking class-action status. The lawsuit said the alleged ERISA abuses have taken place since June 7, 2016.
The plaintiffs also alleged that the plan's target-date funds "deprived participants of meaningful returns and exposed them to unexpected risks," the lawsuit said.
"Here, the defendants decided to create their own suite of target date funds, a practice which is baffling giving the number of excellent target date suites available on the market," the lawsuit said.
"The instant funds created by the defendants failed to meaningfully change their risk return profile as an investor grows closer to retirement age (which is) expected of a target date suite," the lawsuit said.
A company representative didn't respond to a request for comment.
Reyes Holdings 401(k) Thrift Plan, Rosemont, Ill., had $1.35 billion in assets as of Dec. 31, 2020, according to the latest Form 5500.
