Participants in a Tyson Foods 401(k) plan have sued the company and plan fiduciaries alleging ERISA violations because plan executives charged excessive record-keeping fees and failed to replace the record keeper, Northwest Plan Services.
The defendants should have lowered the fees "by soliciting bids from competing providers and using its massive size and correspondent bargaining power to negotiate for fee rebates, but it did not do so, or did so ineffectively," said the complaint filed Nov. 30 in a U.S. District Court in Fayetteville, Ark.
Given its asset size of $3.2 billion last year, "the plan had more bargaining power regarding plan fees and expenses than almost any other 401(k) plans in the United States," said the complaint in Ruebel et al. vs. Tyson Foods Inc. et al.
"Defendants, however, did not regularly monitor Northwest to ensure that Northwest remained the prudent and objectively reasonable choice" to provide total record-keeping services, said the lawsuit, which is seeking class-action status.
Northwest isn't a defendant. It has been the plan's record keeper for 15 years, the lawsuit said.
A company representative didn't return a request for comment.