Two participants in a 401(k) plan offered by Knight-Swift Transportation Holdings Inc. have sued the company, accusing it of ERISA violations because record-keeping fees were too high and investments were too expensive compared with similar ones in the marketplace.
"There is nothing to indicate that defendant has undertaken a proper RFP since 2016" for record-keeping services, said the complaint, which seeks class-action status and was filed Oct. 26 in a U.S. District Court in Phoenix.
"If defendant had undertaken an RFP to compare Principal's compensation with those of others in the marketplace, defendant would have recognized that Principal's compensation during the class period has been (and remains) unreasonable and excessive," said the complaint in Hagins et al. vs. Knight-Swift Transportation Holdings Inc.
Principal Financial isn't a defendant. Current and former participants since Oct. 18, 2016, are identified of the class harmed by the plan's management.
"Defendant either engaged in little to no examination, comparison, or benchmarking of the record-keeping/administrative fees of the plan to those of other similarly sized 401(k) plans, or it was complicit in paying grossly excessive fees," the complaint said.
The plaintiffs also accused the company of mismanagement because it allegedly selected more expensive share classes of mutual funds "instead of low-cost institutional shares of the same funds."
A company representative did not respond to a request for comment.
The Knight-Swift Transportation Holdings Inc. Retirement Plan, Phoenix, had $432 million in assets as of Dec. 31, 2021, according to the latest Form 5500.