Participants in a defined contribution plan sponsored by GKN North America Services Inc. filed a class-action lawsuit against the Auburn Hills, Mich.-based firm and related parties for breaching their fiduciary duties in violation of ERISA.
In the complaint, which was filed in U.S. District Court in Detroit on Oct. 19, lead plaintiffs Jeffrey Parker, Donald B. Losey and Shelley Weatherford contend that sponsors of the $895 million GKN Group Retirement Savings Plan used GoalMaker, an asset allocation service offered by Prudential Financial Inc. that funneled participants' investments into high-priced investment options that paid Prudential kickbacks.
The suit argues that the use of this service "resulted in the participants paying excessive investment management fees (and) administrative expenses," costing them "millions of dollars in retirement savings."
"GKN could have easily stopped these abuses at any time by replacing the unreasonably high-fee, underperforming GoalMaker funds with reliable, low-fee Vanguard index funds already in the plan's investment menu or with other less expensive target retirement date funds offered by numerous mutual fund families," the complaint added.
Prudential was the plan's record keeper until 2019 and is not named as a defendant in the lawsuit. The complaint states that GKN retained GoalMaker until 2020.
Laura Kavanagh, a spokeswoman for Prudential, and representatives from GKN, could not be immediately reached for comment.
