Former participants in a Cerner Corp. 401(k) plan have sued the company and plan fiduciaries alleging breaches of fiduciary duty, ranging from imposing high fees to keeping poor-performing investments and failing to conduct competitive bidding for record-keeping services.
"The plan had substantial bargaining power regarding the fees and expenses that were charged against participants' investments," said the lawsuit that was filed Jan. 21 in a U.S. District Court in Kansas City, Mo.
"Defendants, however, did not try to reduce the plan's expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the plan to ensure it was prudent," the complaint said.
Plaintiffs alleged that plan managers could have replaced some existing investments with similar ones that were cheaper and/or that had better results, according to the complaint, Freck et al. vs. Cerner Corp. et al.
They also criticized the fiduciaries for failing to offer the lowest-priced share classes for some mutual funds in the investment lineup and "failed to consider" collective trusts, commingled accounts or separate accounts, as lower-cost alternatives to the mutual funds in the plan lineup.
The company didn't respond to requests for comment.
The Cerner Corp. Foundations Retirement Plan, North Kansas City, Mo., had assets of $2.1 billion as of Dec. 31, 2018, according to its latest Form 5500.