Former employees of U.S. Bancorp sued the company and its 401(k) fiduciaries alleging violations of ERISA in the management of their retirement plan.
The two ex-employees accused the defendants of offering a plan with excessive record-keeping fees and failing to replace the plan's record keeper and managed account service provider.
"These objectively unreasonable record-keeping and managed account fees cannot be contextually justified," said the lawsuit in Dinicio et al. vs. U.S. Bancorp et al., filed Jan. 5 in a U.S. District Court in Minneapolis.
"Defendants unreasonably failed to leverage the size of the plan to pay reasonable fees" for record keeping and managed account services and failed to conduct "a competitive bidding process to see if (the) same level and quality of services could be had by the plan for less," the lawsuit said.
The defendants had "substantial bargaining power regarding plan fees and expenses," said the lawsuit, which is seeking class-action status.
However, the defendants "did not regularly monitor Alight and AFA to ensure that Alight and AFA remained the prudent and objectively reasonable choices," said the lawsuit, referring to Alight Solutions, the record keeper, and Alight Financial Advisors, the managed account provider. These companies aren't defendants.
Cheryl Leamon, a U.S. Bancorp spokeswoman, wrote in an email that the company declined to comment.
The U.S. Bank 401(k) Savings Plan, Minneapolis, had $9.9 billion in assets as of Dec. 31, 2021, according to the lawsuit.