A major employer in Washington, D.C., and around the country, Salesforce is facing an ERISA lawsuit over claims that it did not properly handle its retirement program. Specifically, the plan administrators are accused of breaching their fiduciary duty to plan members and beneficiaries. Salesforce, its board of directors and its investment committee are all named as defendants in the suit, which alleges that the company failed to save the assets of its plan members by opting for lower-fee investment management options. The large retirement plan had over $2 billion in assets in 2018, which the plaintiffs say gives it significant leverage in negotiating a better deal.
They say that Salesforce, in violation of its ERISA obligations, failed to reduce plan expenses or use its judgment to determine which investment options would best reflect the interests of plan participants and beneficiaries. The plan invests in a number of mutual funds, but the plaintiffs say that Salesforce did not take advantage of lower-cost share classes, causing the fund as a whole to lose out on income over the years. They also said that the investment committee did not consider alternative options that would provide significant savings.
In 2019, Salesforce changed many of these practices, converting mutual fund holdings into lower cost shares. However, the plaintiffs say that they lost out on money for five years due to Salesforce’s delay in making the decision to change. They say that because Salesforce failed to monitor the expenses of the plans, it breached the duties it owed to put the interests of plan participants first.
ERISA protects workers who rely on their employee benefit plans, including health insurance, retirement funds and disability insurance, from mismanagement and waste. Workers who have faced denied claims or lost benefits due to corporate decisions may consult with an attorney about pursuing ERISA benefits claims.