(Source) – A federal judge has for the second time dismissed a lawsuit seeking class action status alleging that Chevron’s retirement plan overpaid Vanguard in recordkeeping fees.
The claim, brought last year by Schlichter, Bogard & Denton, asserted that the $19 billion plan violated the Employee Retirement Income Security Act in part by paying Vanguard asset-based recordkeeping fees rather than a consistent, per-account charge and by failing to put the contract out to bid.
Oakland, Calif., federal court Judge Phyllis Hamilton granted Chevron’s motion to dismiss in August for lack of evidence, but she left the door open to the plaintiffs’ amending the complaint. The plaintiffs did subsequently refile, and in a decision last week Hamilton dismissed the claims again — this time “with prejudice,” meaning they cannot be refiled. Click here for the full article.
Our take – Not often do you hear the words excessive fees and Vanguard in the same story, but despite setting the industry standard for low cost investments, Vanguard is compensated quite handsomely to gain access to their 401k record keeping platform. However, and fortunately, charging a fee for a service is not against the law and the court acted accordingly.