Request a Proposal

Costco Case

This lawsuit, filed by a participant in the Costco 401(k) Plan, alleges a fiduciary breach of duty by allowing excessive plan recordkeeping fees, paid to T. Rowe Price as the Plan’s recordkeeper, as well as investment fees despite less expensive better performing funds were available to the Plan. Further, methodologies for plan recordkeeping fees are in question, as those fees are allegedly “consistently greater” than those of similar size plans that primarily charge a per participant fee instead of as a percent of total plan assets. The active funds offered are allegedly expensive, active funds rather than index funds that would offer comparable or better performance at lower cost. Also outlined are the lack of a viable methodology to monitor fund expenses, an independent review process for investment fees, and failure to leverage the plan size as a means to negotiate lower investment fees and suggestion of failure to track and summarize the recordkeeper’s full compensation through various recordkeeping reports such as fee disclosures and comparative cost analyses.

www.plansponsor.com; June 24, 2020.