Former employees of Salesforce.com Inc. have sued the company and 401(k) plan fiduciaries contending the defendants violated ERISA by retaining allegedly poor-performing investments and charging high record-keeping fees.
The company changed it's legal name to Salesforce Inc. in 2022.
The complaint filed Feb. 9 in a U.S. District Court in San Francisco attacked plan managers for offering the J.P. Morgan target-date funds series and the BlackRock Equity Dividend Fund, which plaintiffs claimed fared worse than some peer products and benchmarks. The providers aren't defendants.
"The plan's fiduciaries failed to adequately monitor and remove the challenged plan investments," said the complaint in Simonelli et al. vs. Salesforce.com Inc. et al. The plaintiffs are seeking class-action status covering any participant or beneficiary from Feb. 9, 2018, to the date of judgment.
"The plan's record-keeping fees during the class period were unreasonable," the lawsuit said, alleging that the "routine" services offered by Fidelity Investments didn't merit the costs. Fidelity isn't a defendant.
"There is no indication defendants conducted RFPs at reasonable intervals" to compare record-keeping costs and services, the lawsuit said.
A company representative did not respond to a request for comment.
Salesforce 401(k) Plan, San Francisco, had $5.7 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.