A class of 401(k) retirement plan participants and beneficiaries is suing the Vail Corporation for violating the duties of loyalty and prudence required by The Employee Retirement Income Security Act of 1974 (ERISA).
The defendant, by exercising discretionary authority and control over the 401(k) defined contribution pension plan that it provides employees, has a fiduciary duty under ERISA to avoid excessive fees.
In 2018, the Vail Plan had 8,276 participants and $309,822,304 in assets. It offered approximately 27 different investment choices to participants.
The lawsuit states, "At all relevant times, the Vail Plan's fees were excessive when compared with other comparable 401k plans offered by other sponsors that had similar numbers of plan participants, and similar amounts of money under management. The excessive fees led to lower net returns than participants in comparable 401k plans enjoyed."
An assessment tool found that, in 2017, the plan's expenses were nearly double those of the mean among 19 comparable plans.
The lawsuit also contains allegations that the plan issuer offered a cheaper option for at least 18 of the 27 mutual fund share classes that charged lower fees and consistently achieved higher returns. However, the plan "inexplicably failed to select these lower fee-charging and better-return producing share classes."
The defendant is alleged to have breached the fiduciary duties it owes to plan participants and beneficiaries.
The class action lawsuit seeks to "enforce Vail's liability under 29 U.S.C. § 1109(a) to make good to the Plan all losses resulting from Vail's breaches of fiduciary duty." Kurtz v. Vail Corporation (US.D.Ct of Colorado-1:20-cv-00500, filed 02-24-20); Rebecca Moore "Vail Corporation Sued Over Share Class Choices for 401(k) Investments" plansponsor.com (Feb. 27, 2020).