A group of five 401(k) plan participants filed a class-action lawsuit against Humana Inc., Louisville, Ky., its board of directors and retirement plan committee alleging they breached their fiduciary duties associated with the investment options offered in the plan.
The suit, filed in U.S. District Court in Louisville on April 13, alleges the health insurer breached its duties under the Employee Retirement Income Security Act of 1974 by failing to review investment options to make sure they were cost effective, failing to control the plan's administrative and record-keeping costs, and by maintaining specific funds in the plan when similar investment options were available at lower costs or with better performance histories.
The suit said the plan held $488 million in its assets in investment options that had higher fees than comparable funds in similarly sized plans, some funds used needlessly expensive share classes, and that record-keeping and administrative costs were excessive during the class period of April 13, 2015 through the date of judgment.
As of Dec. 31, 2019, the Humana Retirement Savings Plan had $5.4 billion in assets, according to its most recent 11-K filing with the SEC. As of that same date, the plan had nine individual CIT options, two mutual fund options, and a Charles Schwab target-date fund lineup.
Mark K. Gyandoh and Donald R. Reavey, partners at Capozzi Adler, attorney for the plaintiffs, and Humana spokesman Alex Kepnes, could not be immediately reached for comment.