VCA Inc. latest to face 401(k) class action

VCA Inc. latest to face 401(k) class action
VCA participants paid annual record-keeping fees of up to $105, while some comparably sized 401(k)s have fees closer to $38, plaintiffs claim.
NOV 29, 2021

VCA Inc., which operates a chain of veterinary hospitals, is being sued over its former 401(k) plan, with plaintiffs in the proposed class action alleging excessive administrative fees.

In the case filed last Monday in U.S. District Court for the Central District of California, law firms Ahdoot & Wolfson and the Roberts Law Firm claim that VCA breached its duty of prudence and failed to monitor fiduciaries.

Between 2015 and 2020, the record-keeping fees paid by participants annually were as high as $105, while some comparably sized 401(k)s have annual fees closer to $38, according to the complaint. The higher-than-necessary fee arrangement, which included revenue sharing paid through mutual fund fees to the record keeper, Prudential, was the result of VCA's not having solicited requests for proposals from vendors, the law firms stated.

“Had defendants conducted an RFP for record-keeping services or merely solicited competitive bids, they would have learned … that other record-keeping providers, as well as Prudential, offered the same or similar record-keeping and administrative services provided by Prudential for less than half of what the plan paid in direct compensation,” the complaint read. “Defendants’ failure to conduct an RFP for many years and during the class period was a breach of their fiduciary duty to prudently monitor plan fees and assure such fees were reasonable, and caused harm to the plan and its participants.”

The plan represented more than 11,600 participants as of the end of 2019 and had more than $563 million in assets. However, the plan was merged last year with the larger Mars Veterinary Health 401(k) Savings Plan, which according to data from the Department of Labor represented about $859 million among 2,400 participants. That followed Mars’ 2017 acquisition of VCA.

VCA, which itself has built a business on acquiring veterinary hospitals, medical imaging equipment and dog daycare centers, did not immediately respond to a request for comment.

Latest News

What advisors need to know about SECURE 2.0’s impact on retirement income planning
What advisors need to know about SECURE 2.0’s impact on retirement income planning

Catch-up contributions, required minimum distributions, and 529 plans are just some of the areas the Biden-ratified legislation touches.

EToro to tokenize US stocks on Ethereum network for 24/7 trading
EToro to tokenize US stocks on Ethereum network for 24/7 trading

Following a similar move by Robinhood, the online investing platform said it will also offer 24/5 trading initially with a menu of 100 US-listed stocks and ETFs.

GTCR to acquire FMG Suite, expanding its wealth tech portfolio
GTCR to acquire FMG Suite, expanding its wealth tech portfolio

The private equity giant will support the advisor tech marketing firm in boosting its AI capabilities and scaling its enterprise relationships.

$29B Lido Advisors expands in Utah with Olympus Wealth Management
$29B Lido Advisors expands in Utah with Olympus Wealth Management

The privately backed RIA's newest partner firm brings $850 million in assets while giving it a new foothold in the Salt Lake City region.

Annuities hit new $223B high in H1 2025, LIMRA says
Annuities hit new $223B high in H1 2025, LIMRA says

The latest preliminary data show $117 billion in second-quarter sales, but hints of a slowdown are emerging.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

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.