Edelson Lechtzin LLP has filed an ERISA breach of fiduciary duty class action lawsuit on behalf of participants in the CDI Corporation 401(k) Plan in the Eastern District of Pennsylvania.
Two former employees of CDI Corp. allege that CDI, its Board of Directors, and the CDI Corp. 401(k) Savings Plan Committee breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 ("ERISA") in the suit filed in Pennsylvania federal court.
The Complaint alleges that CDI failed to use the plan's "substantial bargaining power" to lower the costs paid by Plan participants, including by not taking advantage of institutional class shares that were an identical, cheaper alternative to ones used by the plan, stating: "There is no good faith explanation for utilizing a high-cost share class when a lower-cost share class is available for the exact same investment."
And the company also failed to evaluate and remove funds with a historically bad performance, the workers said.
Additionally, the Complaint asserts that CDI and the other defendants hired investment advisers and consultants that had conflicts of interest and did not keep the compensation provided to the plan's record-keeper under control, stating: "Given the prevailing trends in the competitive marketplace for record-keeping services during this time period, the exact opposite should have occurred."
The proposed class covers participants and beneficiaries in the CDI 401(k) Plan from July 2014 to the present, excluding the defendants and their immediate families. As of December 2018, there were 7,030 plan participants with account balances.
The case is Crawford et al v. CDI Corporation et al, Case No. 2:20-cv-03317-CFK.