Anthem 401(k) plan participants sue company over higher fees
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Participants in the $5.1 billion Anthem Inc. 401(k) plan, Indianapolis, sued plan executives, alleging breaches of fiduciary duties by paying “unreasonable” record-keeping expenses and failing to choose lower-cost investment options.
“Anthem selected high-priced share classes of mutual funds, instead of identical lower-cost share classes of those same mutual funds that were readily available,” said the complaint filed Dec. 29 in U.S. District Court in Indianapolis, which seeks class-action status for participants. The case is Bell et al. vs. Anthem Inc. et al.
“Anthem also failed to adequately investigate and to offer mutual fund alternatives, such as collective trusts and separately managed accounts prior to 2013,” said the complaint filed by law firm Schlichter, Bogard & Denton L.L.P. Jerome Schlichter is the firm's founding and managing partner and lead attorney for the plaintiffs.
In their lawsuit, the participants criticized Anthem for its dealings with Vanguard Group, which is the 401(k) plan's record keeper and provider of most of the plan's investment options. Vanguard is not a defendant.
The complaint said Anthem paid “unreasonable investment management fees from excessively high-priced options” regarding Vanguard strategies To support its arguments, the plaintiffs' suit noted that Anthem made several investment lineup changes in mid-2013 to reduce expenses, including moving target-date funds to collective investment trusts from mutual funds and moving some mutual funds to institutional share classes from retail share classes.
“These lower share classes of the identical mutual funds were available to the plan many years before Anthem restructured the investment lineup in 2013,” the complaint said.
A spokeswoman for Anthem, did not return a call seeking comment.
Robert Steyer writes for Pensions & Investments, a sister publication of Business Insurance.
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