Participants in a Voya Financial Inc. 401(k) plan have sued the company, several subsidiaries and plan fiduciaries alleging ERISA violations of self-dealing in the management of the plan.
"Defendants selected for the plan and repeatedly failed to remove or replace a number of deficient proprietary retirement investment funds managed and offered by defendant Voya Financial Inc.," said the complaint filed Dec. 14 in U.S. District Court in Hartford, Conn.
"These funds were not selected and retained for the plan as the result of an impartial or otherwise prudent process, but were instead selected and retained by defendants because they benefited financially from the inclusion of these options in the plan," said the complaint in the case of Ravarino et al vs. Voya Financial Inc. et al.
"As a matter of corporate policy, we do not comment on specific allegations in pending legal matters," Christopher Breslin, a Voya spokesman wrote in an email. "However, I can tell you that Voya believes in its plan and its process, and intends to defend the case vigorously."
The complaint alleged that the ERISA violations started in December 2015 and continue to the present day.
"By choosing and then retaining the Voya funds as a core part of the plan's investments to the exclusion of alternative investments available in the 401(k) plan marketplace, defendants enriched themselves at the expense of their own employees," the complaint said. The participants are seeking class-action status.
The plaintiffs maintained that fiduciaries failed to use the plan's asset size to negotiate better terms, better investments and lower costs for investments. "Likewise, the plan could have obtained superior and unconflicted administrative services for the plan, including record-keeping services," the complaint said.
The participants criticized the fiduciaries' retaining a Voya target-date series, stable value fund and several other funds, contending in each instance that there were better respective products in the marketplace.
Participants also assailed Voya's record-keeping of its own plan. "There is no indication that defendants reached out to any independent administrative services providers to conduct a proper bidding process or engaged in appropriate negotiations with such third parties in connection with the plan's administrative services during the relevant period," the complaint said. "The total amount of administrative fees paid in connection with the plan throughout the relevant period was unreasonable and imprudent, and contrary to the plan's best interests,"
The Voya 401(k) Savings Plan, Atlanta, had assets of $2.23 billion as of Dec. 31, 2020, according to the latest Form 5500.
