The complaint for this class action alleges that the those responsible for the General Mills 401(k) Plan—its fiduciaries—did not fulfill the duties they owed the plan in that role. Claiming they spent too much on recordkeeping and administrative (RKA) fees and engaged in self-dealing, it brings suit against General Mills, Inc., its board of directors, its Benefits Finance Committee, and Christopher Brunson, its plan administrator, under the Employee Retirement Income Security Act (ERISA).
The class for this action is all participants and beneficiaries of the General Mills 401(k) Plan, between October 14, 2016 and the date of judgment in this case.
ERISA specifies that fiduciaries for retirement plans must act “with the care, skill, prudence, and diligence” of a prudent and knowledgeable person in the same situation.
With more than 20,000 participants and over $4 billion in assets in 2020, the plan the plan was one of the largest in the country—a mega plan—and the complaint alleges it should have had bargaining power in the market for RKA services. RKA services, the complaint claims, have become commodified, so that most RKA service providers offer the same levels of service and quality, with very little difference between them. According to the complaint, the fiduciaries for the plan should have gotten competitive bids from various providers in the market.
Instead, the complaint alleges that they maintained a “high-cost recordkeeper, Aon Consulting Inc./Alight Solutions” in that position and, during the period covered by this case, paid an effective rate of $81-98 per participant per year. A table in the complaint compares this with RKA fees of $20-30 for a number of other, similar plans. The complaint alleges, “Defendants did not engage in any regular and/or reasonable examination and competitive comparison of the Bundled RKA fees it paid to Alight vis-à-vis the fees that other RKA providers would charge.”
The extra amount paid to Alight, the complaint says, amounts to losses of around $65 per year, per participant.
The complaint also charges the defendants with self-dealing, alleging that “General Mills paid itself for providing ‘plan administration’ services to the Plan.” The total charged to the plan for these services over the period covered by this class action, the complaint claims, was more than $2.6 million. But the complaint claims that these services were unnecessary and did not provide any value to the plan.
The complaint alleges, “The ‘plan administration’ services purportedly provided to the Plan by General Mills are standard ‘plan administration’ services that were provided already by the Plan’s recordkeeper, Alight.” The complaint alleges General Mills’s payments of these fees to itself amount to a prohibited transaction under ERISA.
Article Type: LawsuitTopic: Employment
Most Recent Case Event
General Mills 401(k) Plan Breach of Fiduciary Duty Complaint
October 14, 2022
The complaint for this class action alleges that the those responsible for the General Mills 401(k) Plan—its fiduciaries—did not fulfill the duties they owed the plan in that role. Claiming they spent too much on recordkeeping and administrative (RKA) fees and engaged in self-dealing, it brings suit against General Mills, Inc., its board of directors, its Benefits Finance Committee, and Christopher Brunson, its plan administrator, under the Employee Retirement Income Security Act (ERISA).
General Mills 401(k) Plan Breach of Fiduciary Duty ComplaintCase Event History
General Mills 401(k) Plan Breach of Fiduciary Duty Complaint
October 14, 2022
The complaint for this class action alleges that the those responsible for the General Mills 401(k) Plan—its fiduciaries—did not fulfill the duties they owed the plan in that role. Claiming they spent too much on recordkeeping and administrative (RKA) fees and engaged in self-dealing, it brings suit against General Mills, Inc., its board of directors, its Benefits Finance Committee, and Christopher Brunson, its plan administrator, under the Employee Retirement Income Security Act (ERISA).
General Mills 401(k) Plan Breach of Fiduciary Duty Complaint