Here's a term you really don't want used to describe your 401(k): "One of the most expensive plans in America."
That's what law firm Nichols Kaster calls the $1.3 billion retirement plan at the center of a proposed class action against Fujitsu Technology and Business of America Inc. In a lawsuit filed recently in San Jose federal court, the attorneys alleged a cornucopia of fiduciary breaches tied to excessive fees, record keeping, and the components of the company's target-date funds. The case, and several like it in the past year, may be harbingers of a new cycle of 401(k)-gone-bad litigation, this time targeting ever-smaller retirement plans.
Nichols Kaster compared the Fujitsu plan's fees with those of about 650 other plans with more than $1 billion in assets. Among 401(k)s with that much money, the average plan has annual costs that amount to 0.33 percent of assets, according to the complaint; it estimates that Fujitsu's costs were 0.88 and 0.90 percent for 2013 and 2014. That would have led to at least $7 million in excess fees that could have been socked away in employee nest eggs, the complaint stated. Fujitsu America, which provides technology and business support to affiliated companies, has yet to answer the complaint or make an appearance in the case, and a company spokesman declined to comment.
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