Participants in Anthem Inc.\u2019s 401(K) plan are accusing the plan\u2019s fiduciaries of breaching their fiduciary duties under the Employee Retirement Income Security Act of 1974. They claim that the fiduciaries churned excessive administrative and investment management fees in Vanguard mutual funds. Vanguard Group is the fund\u2019s record-keeper.<\/p>\n
According to plaintiffs, the plan fiduciaries chose mutual fund share classes that were \u201chigh-priced\u201d instead of equivalent ones that didn\u2019t cost as much and were also available to the plan. As of 12\/14, Anthem\u2019s 401(k) plan offered 11 Vanguard mutual funds, including Institutional and Admiral share classes: Vanguard target-date collective investment trust funds, a fund offered by Touchstone Investments, funds by Artisan Partners, and an Anthem common stock fund. The lawsuit claims that each fund in the plan charged fees excessive to what Anthem could have gotten elsewhere with funds that were comparable.<\/p>\n
The Anthem 401(k) fund participants also contend that Vanguard was paid excessive fees for record-keeping related services from \u201910-’13, which was when the plan paid about $80-$94\/participant for record keeping through revenue-sharing and hard-dollar fees. It wasn\u2019t until 9\/13 that the cost was reduced to a flat yearly fee of $42\/participant.<\/p>\n
The plaintiffs argued that a reasonable fee\u2019s \u201coutside limit\u201d for this particular plan should have been no higher than $30. The class-action securities case also claims that instead of including a stable value fund in the plan, there was a money market fund that generated returns that were \u201cmicroscopic.\u201d<\/p>\n