Three former employees of Steel Dynamics Inc. have sued the steel producer and fiduciaries of the company's 401(k) plan for violating ERISA by retaining the PIMCO RealPath Blend Series of target date funds that plaintiffs allege is a poor-performer.
"Plan fiduciaries failed in their obligation to prudently select and monitor the plan's investment options resulting in damages to the plan and its participants," said the complaint filed Aug. 22 in a U.S. District Court in Fort Wayne, Ind.
"Defendants breached their fiduciary duties by selecting and retaining in the plan's lineup the chronically underperforming PIMCO RealPath Blend Series of target date funds," said the complaint in Baird et al. vs. Steel Dynamics Inc. et al., which is seeking class-action status.
Pacific Investment Management Co. LLC isn't a defendant. The plan offered the collective trust target-date series in April 2020.
Plaintiffs allege the PIMCO target-date series fared poorly when compared to products from three other target-date fund providers and to target-date indexes from Morningstar and S&P Global.
"The performance of the PIMCO RealPath Blend Collective Trust Series lagged behind the performance of the applicable comparator funds for many years before its inclusion in the plan in 2020, clearly showing that it was an imprudent choice for the plan," the lawsuit said.
"There's no justifiable reason" why fiduciaries chose and retained the PIMCO series "given the data that was available to the plan's fiduciaries prior to the inclusion of this series in the plan," the lawsuit said.
A company representative did not return a request for comment.
Steel Dynamics Inc. Profit Sharing and Retirement Savings Plan, Fort Wayne, Ind., had assets of $2.04 billion as of Dec. 31, 2021, according to the latest Form 5500.