A U.S. District Court judge in Iowa on Thursday ruled in favor of Hy-Vee in a class-action suit alleging that the retailer overcharged participants in its 401(k) retirement plan.
The suit had claimed that Hy-Vee had assessed excessive fees for recordkeeping in its administration of the plan, which was managed by Principal Life Insurance Co. The court, however, ruled that Hy-Vee had done appropriate due diligence in researching the administrative fees, and in fact had reduced fees during the period in question, from 2016-2022.
“There is simply no basis for a reasonable factfinder to conclude that defendants [Hy-Vee] breached their fiduciary duties,” the court ruled.
The plaintiffs, Theresa L. Rodriguez, Zachary M. Shank, Michael P. Mansberger, Heidi L. Detra, and Tim Campbell, claimed in their class-action suit that Hy-Vee did not do enough to minimize the recordkeeping fees for the 401(k) retirement plan during the period. The suit was filed last May in the U.S. District Court for the Southern District of Iowa, naming Hy-Vee, its board of directors, the retailer’s retirement plan investment committee, and other unspecified parties.
U.S. District Court Judge Stephen H. Locher ruled, however, that Hy-Vee’s retirement plan committee had adequate processes in place to monitor and evaluate the fees that plan participants were charged. He also said that the plaintiffs’ efforts to show that other companies’ retirement plans offered lower fees were inadequate, as these plans were not necessarily representative of the market as a whole and did not appear to be an “apples-to-apples” comparison.
According to his summary motion to dismiss the suit, the fees for administering the plan fell from a high of $92.64 in 2007 to $36.93 in 2021. The plaintiffs in their suit had argued that fees should have fallen even more during the period in question.
The suit was filed on behalf of more than 55,000 participants in Hy-Vee’s 401(k) plan, which has more than $2 billion in assets.
The legal counsels for the plaintiffs could not be reached for comment. A spokesperson for Hy-Vee could also not be reached.