A U.S. District Court federal magistrate judge in the Eastern District of Wisconsin mostly sided with Nestlé USA Inc by recommending the dismissal. of a class action lawsuit alleging fiduciary negligence and self-dealing in Nestlé’s $4.2 billion 401(k) savings plan, but left room for two charges to be amended and refiled.
A participant of the plan filed the class action claiming that breached their fiduciary duties by actions that include charging excessive fees for managed account services and self-dealing in their administration of the plan.
The magistrate judge claimed that most of the plaintiff’s allegations against Nestlé fell short of meeting the requirements to move the case forward, Two counts related to the level and quality of recordkeeping services have merit, allowing the plaintiff amend them and refile with the court.
The initial lawsuit claimed that a managed account service offered by Voya Retirement Advisors included additional fees that added no more material value for participants than its cheaper target-date fund option. The complaint also alleged that Nestlé paid itself for providing administrative service that did not provide any value to the plan, and was not provided for the exclusive benefit of the participants.
