Schlichter Bogard & Denton Sues on Behalf of Insperity 401(k) Participants
Schlichter Bogard & Denton today filed suit in the U.S. District Court, Northern District of Georgia, on behalf of over 50,000 participants in the Insperity 401(k) plan.
The complaint alleges that Insperity breached its fiduciary duties by causing plan participants to pay millions of dollars in excessive recordkeeping fees to Insperity’s proprietary subsidiary, Insperity Retirement Services. In addition, the complaint alleges breaches of fiduciary duties against the plan’s discretionary trustee, Reliance Trust, concerning its imprudent investment decisions, including the decision to offer its own proprietary investments. These alleged breaches substantially reduced the retirement assets of plan participants. The excessive investment management and recordkeeping fees, as well as the performance losses from investing in overly expensive funds, cost participants millions of dollars of their retirement savings.
Insperity is a for-profit company that serves as a professional employer organization which provides human resources and business solutions to small- and medium-sized businesses throughout the United States. The employees of those businesses are enrolled in the Insperity 401(k) Plan.
The four named plaintiffs were all participants and beneficiaries in the Insperity 401(k) Plan, through their employers, who contracted with Insperity.
The complaint also states that the Insperity 401(k) Plan failed to engage in a proper process for the selection and retention of a plan recordkeeper. Insperity, rather than soliciting competitive bids from outside recordkeepers, chose Insperity Retirement Services, a subsidiary of Insperity Inc., allowing Insperity Retirement Services to receive excessive recordkeeping fees.
The complaint also alleges that Insperity and Reliance Trust chose mutual funds and collective trusts with high expenses and poor performance, excluding lower-cost share classes of the identical mutual fund investments.
The complaint also accuses Insperity Holdings, Inc. of breaching its fiduciary duties by failing to adequately monitor its appointee, Reliance Trust. As a consequence of this breach, the Plan suffered substantial losses, through excessive fees and underperforming investments.
The Insperity 401(k) Plan, as of December 31, 2014, had over $2 billion in total assets, which places it in the top 0.08% of the over 621,000 401(k) plans offered in the United States, according to Bright Scope.