Clean Harbors accused in ERISA case of high fees and bad investments

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A former participant in a 401(k) plan operated by Clean Harbors Environmental Services Inc. sued the company and the plan’s trustees alleging violations of ERISA in the selection and retention of certain investments as well as fees charged for investments.

“At all material times, the plan’s investment costs, in particular its share classes and stable value fund offerings, were objectively unreasonable and excessive when compared to other materially identical investment options offered by other sponsors who had a similar number of plan participants,” said the lawsuit filed April 10 in U.S. District Court in Boston.

The participant seeks class action status, arguing that the ERISA violations began on April 9, 2016.

“Throughout the Class Period, (the) Defendants failed to conduct an unbiased and objectively reasonable review of the Plan’s investments on a quarterly basis (and) failed to identify the prudent share classes available for the Plan “said the complaint in Kruzell against Clean Harbors Environmental Services Inc.

The complaint added that the trustees “failed to transfer the plan’s investments into this prudent share class at the earliest opportunity.”

A company representative did not respond to a request for comment.

In addition to criticizing the use of certain allegedly expensive mutual fund share classes, the plaintiff complained about the plan’s stable-value fund strategy.

“Clean Harbors did not have a viable methodology to monitor stable-value fund costs during the Class Period,” the lawsuit said.

Fact sheets showing the costs of stable-value funds other than those chosen by the trustees “were readily available had Clean Harbors exercised a modicum of due diligence,” according to the lawsuit.

Clean Harbor Savings and Retirement Plan, Norwell, Massachusetts, had $814 million in assets as of December 31, 2020, according to the latest Form 5500.

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