According to an article from Plansponsor, a participant of the Aegon Companies Profit Sharing Plan has sued the plan sponsor, Aegon USA, an investment company, for failing to meet the ERISA requirement to act in the best interests of plan participants. The suit alleges that Aegon designed the plan with layers of unnecessary fees, the majority of which are paid to Aegon, which lead participants to pay higher fees than other plans of a similar size. The suit claims that, when compared to benchmarking data provided by BrightScope and Investment Company Institute publications, Aegon’s Profit Sharing Plan pays three times the amount of fees than other plans with a similar amount of assets.
The lawsuit claims that the plan’s collective trusts and pooled separate accounts do not have a true managed feature but instead simply invest in an Aegon mutual fund of the same asset class and strategy as the trusts and pooled separate accounts. This strategy would burden the investment with an unnecessary management fee which Aegon receives. In addition, the suit claims that instead of paying the participant any additional interest earned on liquidated investments, Aegon uses the interest to pay plan expenses.
Has your plan recently compared plan fees to available benchmarking data?