Biogen 401(k) Retirement Plan Breach of Fiduciary Duties Class Action

When companies establish 401(k) plans for their employees, the plans are governed under the Employee Retirement Income Security Act of 1974 (ERISA). Those who handle the plan are fiduciaries for it and, as such, they owe certain duties to the participants and beneficiaries. However, the fiduciaries of Biogen, Inc.’s 401(k) Savings Plan—Biogen, Inc., the Biogen, Inc. 401(k) Savings Plan Committee, and its members—did not fulfill their duties, the complaint for this class action alleges.

The class for this action is all participants in and beneficiaries of the Biogen 401(k) Savings Plan, at any time between August 31, 2013 and the present, including any beneficiary of a deceased person who was a participant in the plan at any time during the class period.

According to the complaint, the defendants in this case “are responsible for selecting, monitoring, and retaining the service provider(s) that provide investment, recordkeeping, and other administrative services.” As fiduciaries of a plan governed by ERISA, they “are obligated to (a) act for the exclusive benefit of participants, (b) ensure that the investment options offered through the Plan are prudent and diverse, and (c) ensure that Plan expenses are fair and reasonable.”

The complaint says, “As of December 31, 2018, the Plan had 6,720 participants with account balances and assets totaling over $1 billion, placing it in the top 0.1% of all 401(k) plans by plan size.” This means that the plan has significant bargaining power when it seeks management and administrative services. However, the complaint says that the fund has not taken advantage of this to lower costs or gain other advantages for plan participants.

The complaint also takes issue with the plan’s investment options. In particular, it points to the Fidelity Freedom Funds, which are “target date” funds that gradually shift to more conservative investments as participants’ retirement dates near. The complaint says that “two of Fidelity’s target date suites are the risky Freedom Funds (the ‘Active suite’) and the substantially less costly and less risky Freedom Index funds (the ‘Index suite’). … A simple weighing of the benefits of the two suites indicates that the Index suite is a far superior option, and consequently the more appropriate choice for the plan.”

Instead, the complaint says, the Active suite was chosen. It was, in fact, the plan’s qualified default investment option for participants who did not have the knowledge or confidence to make individual investment choices. The complaint reproduces tables and provides details to allege that this option is both too expensive and too risky to be appropriate for the plan.

In addition, the complaint claims that the plan has other “objectively imprudent investment options.” It names a number of options and reproduces tables and charts to support its allegations that they are underperforming.

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Biogen 401(k) Retirement Plan Breach of Fiduciary Duties Complaint

August 31, 2020

When companies establish 401(k) plans for their employees, the plans are governed under the Employee Retirement Income Security Act of 1974 (ERISA). Those who handle the plan are fiduciaries for it and, as such, they owe certain duties to the participants and beneficiaries. However, the fiduciaries of Biogen, Inc.’s 401(k) Savings Plan—Biogen, Inc., the Biogen, Inc. 401(k) Savings Plan Committee, and its members—did not fulfill their duties, the complaint for this class action alleges.

Biogen 401(k) Retirement Plan Breach of Fiduciary Duties Complaint

Case Event History

Biogen 401(k) Retirement Plan Breach of Fiduciary Duties Complaint

August 31, 2020

When companies establish 401(k) plans for their employees, the plans are governed under the Employee Retirement Income Security Act of 1974 (ERISA). Those who handle the plan are fiduciaries for it and, as such, they owe certain duties to the participants and beneficiaries. However, the fiduciaries of Biogen, Inc.’s 401(k) Savings Plan—Biogen, Inc., the Biogen, Inc. 401(k) Savings Plan Committee, and its members—did not fulfill their duties, the complaint for this class action alleges.

Biogen 401(k) Retirement Plan Breach of Fiduciary Duties Complaint
Tags: Breach of Fiduciary Duty, ERISA Violations, Employment Violations, Retirement Plan Mismanagement