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Class action lawsuit against Hy-Vee is dismissed

Participants in retailer’s retirement plan had alleged they were overcharged

Mark Hamstra

March 8, 2024

2 Min Read
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Hy-Vee

A U.S. District Court judge in Iowa on Thursday ruled in favor of Hy-Vee in a class-action suit alleging that the retailer overcharged participants in its 401(k) retirement plan.

The suit had claimed that Hy-Vee had assessed excessive fees for recordkeeping in its administration of the plan, which was managed by Principal Life Insurance Co. The court, however, ruled that Hy-Vee had done appropriate due diligence in researching the administrative fees, and in fact had reduced fees during the period in question, from 2016-2022.

“There is simply no basis for a reasonable factfinder to conclude that defendants [Hy-Vee] breached their fiduciary duties,” the court ruled.

The plaintiffs, Theresa L. Rodriguez, Zachary M. Shank, Michael P. Mansberger, Heidi L. Detra, and Tim Campbell, claimed in their class-action suit that Hy-Vee did not do enough to minimize the recordkeeping fees for the 401(k) retirement plan during the period. The suit was filed last May in the U.S. District Court for the Southern District of Iowa, naming Hy-Vee, its board of directors, the retailer’s retirement plan investment committee, and other unspecified parties.

U.S. District Court Judge Stephen H. Locher ruled, however, that Hy-Vee’s retirement plan committee had adequate processes in place to monitor and evaluate the fees that plan participants were charged. He also said that the plaintiffs’ efforts to show that other companies’ retirement plans offered lower fees were inadequate, as these plans were not necessarily representative of the market as a whole and did not appear to be an “apples-to-apples” comparison.

Related:Hy-Vee adds patient, employer clinic to suite of health offerings

According to his summary motion to dismiss the suit, the fees for administering the plan fell from a high of $92.64 in 2007 to $36.93 in 2021. The plaintiffs in their suit had argued that fees should have fallen even more during the period in question.

The suit was filed on behalf of more than 55,000 participants in Hy-Vee’s 401(k) plan, which has more than $2 billion in assets.

The legal counsels for the plaintiffs could not be reached for comment. A spokesperson for Hy-Vee could also not be reached.

About the Author

Mark Hamstra

Mark Hamstra is a freelance business writer with experience covering a range of topics and industries, including food and mass retailing, the restaurant industry, direct/mobile marketing, and technology. Before becoming a freelance business journalist, Mark spent 13 years at Supermarket News, most recently as Content Director, where he was involved in all areas of editorial planning and production for print and online. Earlier in his career he also worked as a reporter and editor at other business publications, including Financial Technology, Direct Marketing News, Nation’s Restaurant News and Drug Store News.

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