A participant in a Janus Henderson 401(k) plan sued the company and plan fiduciaries alleging ERISA violations because the plan contained proprietary investments even though other investments in the marketplace performed better and cost less.
"For investment management companies (like Janus Henderson), the potential for disloyal and imprudent conduct is especially high because the plan's fiduciaries can benefit the company by stocking the plan's investment menu with proprietary funds that a non-conflicted and objective fiduciary would not choose," said the complaint filed Sept. 9 in a U.S. District Court in Denver.
"Defendants have not acted in participants' best interest," said the complaint in Schissler vs. Janus Henderson U.S. (Holdings) Inc. et al., which is seeking class-action status.
"They have used the plan to promote Janus Henderson's proprietary investments and earn profits for Janus Henderson," the complaint said. "As of the end of 2021, defendants stocked the Plan's investment menu with 40 proprietary investments: 1 proprietary money market fund and 39 proprietary mutual funds."
The lawsuit contended that "an objective and prudent review of comparable investments in the marketplace would have revealed numerous available investments that were less costly and superior to the Janus Henderson funds that defendants selected and retained in the plan."
Spokesman Jeremy Osheim wrote in an email that Janus Henderson declined to comment.
The Janus 401(k) and Employee Stock Ownership Plan, Denver, had $511 million in assets as of Dec. 31, 2021, according to the latest Form 5500.