Fidelity Investments is facing a new lawsuit by its employees claiming breach of fiduciary duty in managing the company's in-house 401(k) plan.
The class action suit, filed this week in U.S. District Court in Massachusetts, alleges the Boston-based company did not seek to recapture excess revenue-sharing money held to cover recordkeeping expenses.
A lawsuit filed last March made similar claims, which Fidelity has denied. That suit caused industry observers to say asset managers should make sure they are not breaking any of their fiduciary duties.
Such lawsuits have become more common over the last few years, with more than 30 filed against plan sponsors.
The new suit claims the recordkeeping fees paid by the plan to Fidelity's own mutual fund lineup far exceeded what was reasonable. Dating back to 2007, the suit says the fees were excessive because Fidelity did not have an arm's length relationship with its recordkeepers. Many large plans, the suit said, negotiate hard fees.
