US Roche 401(k) Plan Breach of Fiduciary Duties Class Action

Now that 401(k) plans are the primary form of retirement savings in the US, participants are looking more closely at how employers and administrators manage plans. The complaint for this class action brings suit against Genentech, Inc., the US Roche DC Fiduciary Committee (or Administrative Committee), and the individual committee members, alleging that the US Roche 401(k) Savings Plan has not been adequately managed, causing participants’ accounts to earn less than they should have.

The class for this action is all those who were participants and beneficiaries in the US Roche 401(k) Savings Plan at any time on or after October 2, 2014 to the present.

Plaintiff Matthew Wehner works for Genentech, part of the Roche Group, which is one of the largest pharma companies in the world. The company’s employees are permitted to participate in the US Roche 401(k) plan, which is governed by the Employee Retirement Income Security Act (ERISA).

The Administrative Committee, which manages the plan, is considered a fiduciary of the plan, meaning that it has certain duties in managing the plan. These include the duties of prudence and of loyalty to the participants.

The complaint claims, “The Plan pays Plan expenses from Plan assets, and substantially all administrative expenses are paid by participants as a reduction of investment income.” Keeping expenses low is therefore important.

The complaint alleges that the Roche plan’s recordkeeping and administrative costs are excessive. According to the complaint, “the average cost for recordkeeping and administration in 2017 for plans much smaller than the Plan (plans with 100 participants and $5 million in assets) was $35 per participant.” In that same year, the Roche plan paid $60.88 in total per participant.

This was despite the fact that the Roche plan is much larger—with more than 33,000 participants and over $7.6 billion in assets. The complaint alleges, “Give its size, and resulting negotiating power, with prudent management and administration, the Plan should have unquestionably been able to obtain recordkeeping and administrative services for significantly lower than $35 per participant.”

Another failure of its fiduciary duties, the complaint claims, are expense ratios of the investment options offered by the plan. The complaint asserts that “participants were offered an exceedingly expensive menu of investment options…”

Finally, the complaint alleges that a number of the investment options offered “are objectively imprudent[.]”

Among them are nine custom target date funds (TDFs). Target date funds maintain a portfolio of underlying investments that gradually become more conservative as the target retirement year approaches. According to the complaint, “The Roche TDFs are both significantly more expensive and worse performing than many of the mutual fund alternatives offered by target date fund providers.”

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

US Roche 401(k) Plan Breach of Fiduciary Duties Complaint

October 2, 2020

Now that 401(k) plans are the primary form of retirement savings in the US, participants are looking more closely at how employers and administrators manage plans. The complaint for this class action brings suit against Genentech, Inc., the US Roche DC Fiduciary Committee (or Administrative Committee), and the individual committee members, alleging that the US Roche 401(k) Savings Plan has not been adequately managed, causing participants’ accounts to earn less than they should have.

US Roche 401(k) Plan Breach of Fiduciary Duties Complaint

Case Event History

US Roche 401(k) Plan Breach of Fiduciary Duties Complaint

October 2, 2020

Now that 401(k) plans are the primary form of retirement savings in the US, participants are looking more closely at how employers and administrators manage plans. The complaint for this class action brings suit against Genentech, Inc., the US Roche DC Fiduciary Committee (or Administrative Committee), and the individual committee members, alleging that the US Roche 401(k) Savings Plan has not been adequately managed, causing participants’ accounts to earn less than they should have.

US Roche 401(k) Plan Breach of Fiduciary Duties Complaint
Tags: 401(k) Plans, ERISA Violations, Employment Violations, Retirement Plan Mismanagement