A federal judge in Grand Rapids, Mich., rejected a petition by Alticor Inc., the parent of Amway, to dismiss a lawsuit by former participants in an Amway 401(k) plan who alleged that fiduciaries violated ERISA by failing to reduce plan fees and expenses and failing to offer better performing investments.
"The court concludes that plaintiffs' allegations are enough to survive a motion to dismiss,' wrote U.S. District Judge Paul L. Maloney on Aug. 9. "Plaintiffs allege that not only did defendants provide unsuitable investments, they failed to sufficiently consider other alternatives."
The plaintiffs also alleged that the defendants "failed for years to perform sufficient reviews or investigations into the plan's performance," the judge wrote.
If defendants "did not adequately consider" the performance data information, "it is a breach of ERISA," the judge wrote. "Given that the plaintiffs cannot see the defendants review process without the benefit of discovery, the court finds that this issue is also sufficiently pleaded to withstand the motion to dismiss."
The plaintiffs, who are seeking class action status, filed their complaint in November 2020.
The Amway Retirement Savings Plan, Ada, Mich., had assets of $1.36 billion as of Dec. 31, 2019, according to the latest Form 5500.