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Multiple employer plans (MEPs) have become larger targets for litigation when they achieve a plan of substantial size.
An employee of Heartland Coca-Cola Bottling Company, LLC, an employer that participated in the Coca-Cola Bottlers’ Association 401(k) Retirement Savings Plan, a multiple employer plan has sued the Coca-Cola Bottlers’ Association (CCBA), a Georgia corporation headquartered in Atlanta, whose members consist of all 65 U.S. independent bottlers of Coca-Cola. The MEP covers about 19,000 participants, and had nearly $800 million in assets spread across 24 investment options, including a Coca-Cola Common Stock Fund.
Judge Finds ERISA Claims Sufficient Against Coca-Cola Bottler
The case, which challenges the use of an actively managed TDF suite rather than its index version, will move forward.
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A federal judge has moved forward a lawsuit against Coca-Cola Consolidated (formerly known as Coca-Cola Bottling Co. Consolidated), its board of directors and its benefits committee alleging that the defendants breached their fiduciary responsibilities by mismanaging the plan’s investment lineup.
The lawsuit specifically challenges the fact that the plan used the actively managed Fidelity Freedom Funds target-date fund (TDF) suite rather than the index suite. The plaintiffs say the active suite is too “high risk” to be suitable for the plan’s participants. They said it has higher fees than the index suite, and other plan fiduciaries and investors lost faith in the active suite. The plaintiffs lodged similar allegations with respect to the Carillon Eagle Small Cap Growth Fund Class R5
Coca-Cola Bottlers Association Faces ERISA Lawsuit
Plaintiffs allege missteps by 401(k) plan fiduciaries cost participants millions of dollars in retirement savings.
The Coca-Cola Bottlers’ Association (CCBA) is being sued by participants in its multiemployer 401(k) retirement savings plan who claim the fiduciaries breached their Employee Retirement Income Security Act (ERISA) duties by offering “limited, imprudent investment options and excessive and improper fees.”
The CCBA’s 401(k) Retirement Savings Plan covers all 65 independent Coca-Cola bottlers in the US and serves approximately 19,000 participants. It had roughly $800 million in net assets as of the end of 2019, and is estimated to be in the top 0.1% of all 401(k) plans based on size of both plan assets and the number of participants.
Another MEP targeted in 401(k) litigation, health care system sued
The Coca-Cola Bottlers Association this week was sued over fees and investments in its multiple employer plan. Former participants in a terminated 403(b) sponsored by a health care system also filed claims.
February 4, 2021 2 MINS
A participant in a multiple employer 401(k) available through the Coca-Cola Bottlers’ Association claims in a new lawsuit that excessive administrative and investment fees have eroded millions of dollars in savings within the plan.
The case is different from a 401(k) lawsuit brought last year against the largest U.S. Coca-Cola bottler. Instead, the new litigation targets the MEP used by 65 independent bottlers, representing at least the fifth such plan that has been sued over fiduciary claims in recent months.