Among other alleged infractions in this case, the plaintiffs claim unreasonably expensive managed account fees offered through the managed account provider Strategic Advisors, Inc. (a subsidiary of the Plan’s recordkeeper, Fidelity Investments,) for the Juniper Networks $1.4 billion 401(k) Plan. At 0.65% annually, managed account fees are cited as unreasonable in light of the Plan’s size and negotiating power. The lawsuit also cites lower fees for other comparable managed account providers, charging 0.25% – 0.30% for much smaller plans, as well as the absence of a more favorable tiered pricing structure, available for other large Strategic Advisors clients. Additionally, the lawsuit argues that the service deliverable – the allocation structures for participants’ managed accounts- are not materially different than what participants would receive through much less expensive age-appropriate target date options already available in the Plan. The additional fees represented by the managed account service are not providing any additional value to participants.
www.pionline.com; September 6, 2021.