insurance fraud attorney, class action

Beasley Allen files ERISA class action for Mercedes-Benz employees

Beasley Allen has filed a proposed ERISA class action lawsuit against Mercedes-Benz US International, Inc. and the administrators of its U.S. employees’ 401(k) plan, alleging their failure to properly manage retirement investments resulted in thousands of workers paying “unreasonable and excessive” service fees. Under the Employee Retirement Income Security Act (ERISA), employers are required to monitor their employee investment plans to ensure that service fees and other charges are “reasonable and prudent.”

Lawyers for two of the plan’s participants filed the proposed ERISA class action Friday, Jan. 15, in an Alabama federal court. The complaint alleges Mercedes-Benz allowed overseers of its employees’ retirement plan to charge service fees that were seven times higher than the standard market rate.

W. Daniel “Dee” Miles, III, who heads up Beasley Allen’s Consumer Fraud & Commercial Litigation section, told Law360, “We believe the Mercedes plan participants were not treated fairly and have been overcharged with excessive fees. The case was filed to rectify that inequity.”

Class Action Lawsuit Allegations

The complaint alleges:

“During the class period, the Plan paid between $239 and $567 per participant annually for retirement plan services. During the Class Period, reasonable retirement plan service fees for a plan of this size would have averaged $53 per participant annually.

Failures by ERISA fiduciaries to monitor costs for reasonableness have stark financial consequences for retirees. Every extra level of expenses imposed upon plan participants compounds over time and reduces the value of participants’ investments available upon retirement.

Defendants did not engage in prudent decision-making processes, as there is no other explanation for why the plan paid these objectively unreasonable fees for retirement plan services.”

The class period covers the time from Jan.1, 2015, through the date of judgment.

The 59-page lawsuit demonstrates how $100,000 invested in a 401(k) plan over a 20-year period falls $30,000 short (14% less) with annual fees of 1%, compared to a plan charged annual fees of 0.25% (see page 4).

According to the lawsuit, ERISA requires Mercedes-Benz to shop around for the best deal for the administration of its employee 401(k) plan, yet the automaker’s failure to do that resulted in workers paying around seven times the reasonable market rate for plan administration services. The administrative fees also should have gone down as the number of participants grew, but instead they increased.

Additionally, the proposed ERISA class action alleges Mercedes-Benz overpaid the investment plan’s financial adviser, R.V. Kuhns & Associates, by about three times what it should have paid.

The lawsuit seeks to represent all participants and beneficiaries of the Mercedes-Benz U.S. International, Inc. Retirement and Savings Plan. Approximately 4,500 Mercedes-Benz employees are invested in the plan.

ERISA and Investment Fraud Lawyers

Lawyers in Beasley Allen’s Consumer Fraud & Commercial Litigation section handle claims from employees in a variety of industries whose pensions are in jeopardy due to corporate mergers, bankruptcy or similar circumstances. They are experienced in ERISA laws and investment fraud or mismanagement that negatively affects an employee’s retirement savings. For more information on these types of claims, contact Dee Miles or James Eubank in the Consumer Fraud Section of the firm.

Free Case Evaluation

Since 1979, Beasley Allen has been committed to “helping those who need it most.” Our attorneys have helped thousands of clients get the justice they desperately needed and deserved. You pay us nothing if we do not win for you. Contact us today for a free case evaluation.

For Disclaimers, see our Terms of Use.

Free Case Evaluation Full - Updated

"*" indicates required fields

This field is for validation purposes and should be left unchanged.