$300 million Plan sued over share classes

As long as there are 401(k) plan sponsors who don’t show concern over cost, there will always be ERISA litigators that will take a bite.

The Vail Corporation has been sued for excessive fees in their Vail Resorts 401(k) Retirement Plan.

The lawsuit alleges that 18 of the 27 mutual fund share classes available within the plan, the mutual fund company offered a different share class that charged lower fees.  The complaint noted the data regarding fees and performance taken from Morningstar.com showed that the T. Rowe Price Retirement 2005 fund used by the plan charged 53 basis points (bps), while the I share class of the same fund charged 41 bps.

In 2017, the plan’s expenses amounted to .73% of assets under management, or $314 per participant. The lawsuit alleges that the plan’s expenses are nearly double those of the mean among similar plans with 5-10,000 participants of $179 per participant and .2% of assets under management.


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