The largest Coca-Cola bottling company in the U.S. is facing a class-action lawsuit over its 401(k) plan, with several law firms alleging it allowed excessive fees in violation of ERISA.
In a Nov. 24 complaint filed in U.S. District Court in the Western District of North Carolina, two prominent 401(k) fee litigators lobbed the claims at Coca-Cola Consolidated. Much like numerous other cases brought this year, the allegations relate to the selection of actively managed funds, mutual fund share classes that are not the cheapest available and record-keeping costs that are higher than average.
The law firms -- Capozzi Adler and Shepherd Finkelman Miller & Shah -- are responsible for many of the new cases under the Employee Retirement Income Security Act that have been brought this year against retirement plan sponsors. Another firm, North Carolina-based Whitfield Bryson, also represents the plaintiffs.
The Coca-Cola Consolidated 401(k) represented more than $784 million in assets among about 14,600 participants as of the end of 2019, according to data from the Department of Labor. The bottling company has been in business for 118 years, with the stated purpose “to honor God in all we do, serve others, pursue excellence and grow profitably.” It operates 13 manufacturing facilities and has more than 70 distribution centers, according to its site.
The company did not immediately respond to a request for comment.
The new lawsuit, similar to cases brought this year against other plan sponsors, points to the inclusion of Fidelity’s actively managed Freedom Funds target-date series and alleges that the soda bottler breached its fiduciary duty by not opting for a passively managed series, such as a version of Fidelity’s product. The plan has included the active Fidelity series since at least the end of 2009, according to the complaint.
The bottling company “failed to compare the Active and Index suites and consider their respective merits and features,” the complaint read. “A simple weighing of the benefits of the two suites indicates that the Index suite is and has been a far superior option, and consequently the more appropriate choice for the plan.”
The plan has also included several actively managed funds that are more expensive and have weaker five-year performance history than comparable index funds, the law firms wrote.
The plaintiffs also did not opt for the lowest-fee share classes available and allegedly did not consider collective investment trusts that were nearly identical to mutual funds on the plan menu.
The 401(k) currently has annual record-keeping fees of $59 per participant, while plans of similar size are able to negotiate fees of about $35, the law firms stated in the complaint.
The claims raised in the lawsuit include breach of fiduciary duty, failure to monitor fiduciaries and liability for knowing breach of trust. The plaintiffs in the proposed class are seeking changes to the plan, restitution, damages and attorneys’ fees.
To help fund the proposal, the governor and Florida's finance chief are probing municipal finances on a "local government accountability tour" to uncover potential waste.
Edward Jones’ job cuts and overall realignment internally are contributing to higher costs for the company, it said in its recent quarterly report.
Meanwhile, Fifth Third's RIA arm adds a former billion-dollar BNY trio in Boulder, Colorado, while a hybrid RIA opens a new North Carolina location with a former Raymond James-affiliated team.
Analysis highlights swelling out-of-pocket costs and wasted time on paperwork, with an outsized toll on businesses and around crypto transactions.
The appointment to its investment management arm comes roughly a year after the firm first announced plans to launch its own exchange-traded fund platform.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
