A former participant in a 401(k) plan offered by Serco Inc. sued the company alleging that plan managers breached their fiduciary duties by offering high-fee investment options, failing to offer less-expensive share classes and failing to monitor investments in the plan's lineup.
Fees for investment options were "excessive when compared with other comparable 401(k) plans," whose number of participants and plan assets were similar to those of Serco, said the complaint filed Jan. 28 in a U.S. District Court in Alexandria, Va.
For a majority of investment options, the plan selected those with higher fees compared with lower-cost share classes offered by the same providers, the complaint alleged.
Serco's 401(k) plan "was large enough to qualify for the lower-cost share class," said the complaint in Glasscock et al. vs. Serco Inc. The plaintiff is seeking class-action status.
The lawsuit claimed that Serco fiduciaries "failed to continuously monitor the investment performance of its plan options against applicable benchmarks and peer groups."
The managers also "failed to identify and replace underperforming investments with better-performing and reasonable priced options," the lawsuit said.
Serco Inc. 401(k) Retirement Plan, Herndon, Va., had $335 million in assets as of Dec. 31, 2018, according to the latest Form 5500. A Serco representative did not respond to a request for comment.