A participant in a 401(k) plan offered by Jack Henry & Associates has sued the financial technology firm and its fiduciaries alleging ERISA violations due to high record-keeping and administration fees.
"Defendants unreasonably failed to leverage the size of the plan to pay reasonable fees" for record keeping and managed account services, said the complaint filed Oct. 9 in a U.S. District Court in Kansas City, Mo.
The lawsuit accused defendants of failing to negotiate "reasonable fees" with the plan's record keeper or failing to change record keepers if the current the current provider didn't accept a "reasonable" fee, according to Lacrosse vs. Jack Henry & Associates Inc. et al. The plaintiff is seeking class-action status.
The lawsuit said defendants should have explored the marketplace via RFPs to assess comparative costs and services.
"Having received bids, prudent plan fiduciaries can negotiate with their current record keeper for a lower fee or move to a new record keeper to provide the same (or better) level and quality of services for a more competitive reasonable fee if necessary," the lawsuit said.
"Defendants failed to regularly solicit quotes and/or competitive bids from recordkeepers, including, but not limited to" the current record keeper to reduce fees, the lawsuit said.
"We are reviewing the lawsuit and take these allegations seriously," a company spokesman wrote in an email. "The fact that a lawsuit has been filed does not mean that a court has taken any position on the merits of the claims."
Jack Henry & Associates Inc. 401(k) Retirement Savings Plan, Allen, Texas, had $1.23 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.