A former employee of Omincom Group Inc. sued the company and its fiduciaries, alleging a series of ERISA violations in the management of its 401(k) plan.
Defendants "failed to fully disclose the expenses and risk of the plan's investment options to participants," said the complaint filed July 31 in a U.S. District Court in New York.
The lawsuit, which seeks class-action status, accused the defendants of allowing "unreasonable expenses to be charged to participants for administration of the plan," in the case of Maisonette vs. Omnicom Group Inc. et al.
The plaintiff also said in the lawsuit that the defendants "selected, retained, and/or otherwise ratified high-cost and poorly performing investments, instead of offering more prudent alternative investments, adding that "such prudent investments were readily available."
A spokeswoman for Omnicom did not respond to a request for comment.
Among the specific arguments, the plaintiff said Omnicom fiduciaries should have chosen a less-expensive, passively managed target-date series instead of an actively managed one, both of which were offered by Fidelity Investments. Fidelity isn't a defendant.
The plaintiff also accused the plan of allowing "excessive" record-keeping fees charged by Fidelity.
"Defendants either engaged in virtually no examination, comparison or benchmarking of the record-keeping/administrative fees of the plan to those of other similarly-sized 401(k) plans, or were complicit in paying grossly excessive fees, the lawsuit said.
"Had defendants conducted any examination, comparison or benchmarking, defendants would have known that the plan was compensating Fidelity at an inappropriate level for its size," the lawsuit said.
The Omnicom Group Retirement Savings Plan, New York, had $2.78 billion in assets as of Dec. 31, 2018, according to the latest Form 5500.
