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Xerox Retirement Plan Improper Fees Class Action Lawsuit Overview:
- Who: Former Xerox Corporation employees who are current or former participants in the Xerox’s employee pension benefits plan have sued the company and its savings plan administrator committee.
- Why: The employees claim the Xerox Corporation and the plan administrator committee passed recordkeeping fees that were “well above reasonable market rates” along to participants in the pension benefits plan.
- Where: The lawsuit is being heard in federal court in Connecticut.
Xerox charged excessive recordkeeping fees to its employee pension benefit participants for at least six years, ripping off members of the plan to the tune of millions per year, a new class action lawsuit alleges.
Plaintiffs Chris Carrigan, Michael Venti, and Sylvain Yelle — all participants or former participants in the Xerox Corporation Savings Plan — filed the class action lawsuit against Xerox Corporation and the Xerox Corporation Plan Administrator Committee Wednesday in a Connecticut federal court.
The plaintiffs are suing under the Employee Retirement Income Security Act of 1974 (ERISA). They’re looking to represent all participants of the Xerox Corporation Savings Plan at any time from Aug. 11, 2015 until 2021, when the plan got a new recordkeeper.
The plaintiffs say, shortly after Xerox entered the retirement plan recordkeeping business in the early 2010s, it hired its own affiliate recordkeeping service as the plan’s recordkeeper. It then allegedly passed its fees — which were “well above reasonable market rates” — onto the plan’s participants.
“Defendants allowed the Plan to pay as much as four times more than what the Plan would have paid in the open market for recordkeeping services of comparable or superior quality,” the class action lawsuit says.
“As a result, participants paid millions of dollars per year in excessive fees from 2015 through 2021.”
The plaintiffs say ERISA imposes strict fiduciary duties of loyalty and prudence upon employers and other plan fiduciaries to safeguard retirement plan participants.
However, contrary to these fiduciary duties, Xerox failed to “prudently and loyally” oversee the plan’s recordkeeping service provider, and instead used the plan to promote its own business interests, the class action says.
From the time Xerox hired its own recordkeeping affiliate, Xerox HR Benefit Services, in 2013 until the time it switched to an unaffiliated recordkeeper in 2021, the plan’s recordkeeping expenses more than doubled from $54 per participant in 2013 to $136 per participant by 2019, the plaintiffs say.
“Based on Plaintiffs’ investigation, from 2015 to the present, a prudent and loyal fiduciary of a similarly sized plan (in terms of participant count) could have obtained comparable recordkeeping services of like or superior quality for $30 to $35 per participant (or possibly lower) from recordkeepers such as Fidelity, Vanguard, Alight, and Empower,” the class action states.
Xerox’s employee pension benefit plan covered all eligible U.S. employees of the Xerox Corporation. From 2015 through the end of 2019, the plan has had between approximately 21,000 and 30,000 participants, and between $3.6 billion and $4.3 billion in assets, the class action states.
The plaintiffs are seeking certification of the class action, fees, costs, monetary relief and a jury trial.
ERISA is a federal law meant to safeguard certain types of retirement and pension plans, as well as insurance and disability plans.
In a nutshell, ERISA protects employees who pay into employer-sponsored retirement accounts, such as 401(k) and 403(b) accounts. The Act also covers some welfare benefit plans, such as long term disability insurance (LTD). Click here to learn more.
What do you think of the claims in this class action lawsuit? Let us know in the comments!
The plaintiffs are represented by Joseph D. Garrison of Garrison, Levin-Epstein, Fitzgerald & Pirrotti, p.C. and Paul J. Lukas, Kai H. Richter, Brock J. Specht, Jennifer K. Lee of Nichols Kaster, PLLP.
The Xerox Retirement Plan Improper Fees Class Action Lawsuit is Carrigan, et al., v. Xerox Corporation, et al., Case No. 3:21-cv-01085-RNC, in the U.S. District Court for the District of Connecticut.
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