Participants in the Chevron Corporation 401(k) Plan allege that Chevron and plan executives breached their fiduciary duty, offering the Vanguard Prime Money Market Fund as its sole capital preservation option instead of a stable value fund, with unreasonably high investment management fees relative to funds within the stable value universe (Hueler universe), causing plan participants and retirees to lose over $130 million in retirement savings. Chevron also allegedly failed to investigate less expensive investment alternatives when they were available, including lower costing mutual fund share classes, commingled investment trusts, and separate accounts. While over the past six years, many of the investment options were changed to cheaper share classes or lower cost investment vehicles, the argument is that such changes should have happened sooner. Additionally, plaintiffs claim that the Plan had paid excessive recordkeeping fees to Vanguard, as Chevron did not monitor or control Vanguard’s compensation to ensure reasonability (the contract has not been reviewed in six years).
www.pionline.com; February 22, 2016.
www.planadviser.com; February 22, 2016.