Current and former participants in a 401(k) plan offered by H.E. Butt Grocery Co., San Antonio, Texas, sued the company and the plan alleging violations of fiduciary duty under ERISA.
Among the allegations, the plaintiffs said the defendants "failed to properly monitor and control plan expenses," according to the complaint Montgomery et al. vs. H.E. Butt Grocery Co. et al., filed Tuesday in a U.S. District Court in San Antonio.
The participants claimed that plan fees were too high relative to plans of similar size. They argued that managers of poorly performing, high-fee funds were retained even when investment option results "demonstrated that those high fees were not justified."
The participants, who are seeking class-action status, said that plan executives should have offered a stable value fund rather than a money market fund because the former provides better returns. They criticized this strategy as "giving rise to the inference that defendants failed to prudently monitor" the capital preservation options.
The H-E-B Savings & Retirement Plan had assets of $2.49 billion as of Dec. 31, 2017, according to the latest Form 5500.
A company representative did not immediately respond to a request for comment.