July 23, 2026  ·  Complaint filed June 23, 2026  ·  mdd, No. 1:26-cv-02508

By David Brunk, civil litigation attorney

Read the filing

Scott v. Sodexo Alleges Plan Paid Voya Millions in Excessive 401(k) Fees

Per-Participant Fees Far Exceeded Peer Plans and Industry Benchmarks, Complaint Says

The complaint in Scott v. Sodexo, Inc. alleges that Sodexo, Inc. and the administrative committee of its 401(k) plan allowed Voya Financial, Inc. to receive excessive compensation, violating their fiduciary duties under the Employee Retirement Income Security Act (ERISA). Plaintiffs claim the Defendants failed to negotiate reasonable fees, monitor Voya’s compensation, or solicit competitive bids for recordkeeping services, despite the Plan’s size (top 0.1% of U.S. 401(k) plans) and economies of scale. The plaintiffs assert multiple causes of action, including Count I: Breach of fiduciary duty under ERISA § 404(a)(1), 29 U.S.C. § 1104(a)(1) against the defendants on behalf of plan participants, Count II: Prohibited transactions under ERISA § 406, 29 U.S.C. § 1106, and Count III: Prohibited Transactions and Co-Fiduciary Breaches of Duty (29 U.S.C. §§ 1106(a), 1109(a), 1132(a)(2), 1105(a)). Additional counts include breach of fiduciary duty of prudence (29 U.S.C. § 1104(a)), breach of duty to ensure reasonable compensation (29 U.S.C. § 1104(a)), personal liability for losses (29 U.S.C. § 1109(a)), and failure to adequately monitor other fiduciaries (ERISA § 405, 29 U.S.C. § 1105) against Sodexo.

The plaintiffs—Alton Scott, John Malone, and Clifford Todd Hanks, individually and on behalf of a proposed class—allege that the defendants failed to act as prudent fiduciaries in managing the plan’s recordkeeping fees. The plan reported 86,328 participants with account balances in its 2024 Form 5500 filing and ranks in the top 0.1% of U.S. 401(k) plans by assets. “Fiduciaries must engage in a rigorous process to control these costs to ensure that participants pay no more than a reasonable level of fees,” the complaint alleges. The complaint highlights that Voya’s per-participant fees ranged from $41.60 to $82.79 annually, far exceeding industry benchmarks (e.g., $14–$23 per participant at peer plans like Delta, T-Mobile, and Verizon). Plaintiffs allege the Defendants’ inaction caused the Plan to pay over $10 million in excessive fees, violating ERISA’s requirements for prudence and exclusive benefit. The plaintiffs claim the defendants’ inaction caused the plan to pay Voya per-participant fees ranging from $41.60 to $82.79 annually—far exceeding industry benchmarks for large plans.

Voya’s Fees Dwarfed Those of Peer Plans and Reasonable Benchmarks

The complaint details Voya’s compensation from the plan, which totaled $26,975,677 from 2020 to 2024. Per-participant fees fluctuated as follows:

• 2020: $6,668,251 total, $64.57 per participant;
• 2021: $3,822,807 total, $41.60 per participant;
• 2022: $4,829,958 total, $49.66 per participant;
• 2023: $4,507,464 total, $44.20 per participant;
• 2024: $7,147,197 total, $82.79 per participant.

The plaintiffs contrast these figures with the fees charged by recordkeepers for peer plans of comparable size. For example, the complaint cites the following recordkeeping fees for 2024:

• Delta 401(k) Plan: $2,305,205 total, less than $22 per participant for 107,760 participants;
• T-Mobile 401(k) Plan: $1,831,894 total, approximately $23 per participant for 78,399 participants;
• Verizon Savings Plan for Management Employees: approximately $20.50 per participant for 118,299 participants.

The complaint also references fees charged by Fidelity, a competing recordkeeper, as part of its benchmarking analysis. According to stipulated facts in Moitoso v. FMR LLC, Fidelity’s recordkeeping fees per participant were:

• $21 per participant in 2014;
• $17 per participant from 2015 to 2016;
• $14 per participant from 2017 to the present.

The complaint also references industry surveys and historical benchmarks to support its claim that Voya’s fees were excessive. A 1998 U.S. Department of Labor study found that the average recordkeeping fee was $34 per participant for plans with 1,000 participants. More recent surveys, such as the NEPC 2022 survey, found that reasonable recordkeeping fees for large plans averaged around $40 per participant, with a 2024 NEPC survey setting the maximum reasonable fee at $38 per participant for plans with 50,000 or more participants. The plaintiffs allege that Voya’s fees were “three to four times” the market rate.

The complaint further calculates the maximum reasonable compensation for the Sodexo plan at $35 per participant, resulting in the following figures for each year:

• 2020: $3,614,415;
• 2021: $3,216,010;
• 2022: $3,404,100;
• 2023: $3,569,475;
• 2024: $3,021,480.

Over the five-year period from 2020 to 2024, the total reasonable compensation at this rate would have been $16,825,480, compared to the $26,975,677 actually paid to Voya. The complaint alleges that the plan paid $10,150,197 in excessive fees during this period.

“These services are highly commoditized, with little or nothing distinguishing the services provided by one recordkeeper over another,” the complaint alleges. It further quotes an industry expert stating, “Recordkeeping services have pretty much become a commodity for retirement plan fiduciaries; virtually every major recordkeeper... provide[s] the same core services”. The complaint also notes that third-party vendors in the 401(k) industry use varied pricing and fee structures, which can be complicated and confusing.

Defendants Failed to Solicit Competitive Bids or Monitor Fees

The complaint alleges that the defendants breached their fiduciary duties by failing to solicit competitive bids for recordkeeping services or renegotiate Voya’s fees during the class period. “Defendants failed to leverage the Plan’s size to negotiate lower fees or replace Voya with a lower-cost competitor,” the complaint states. It further alleges that the defendants “knew or should have known to engage in regular, reasonable examination of recordkeeping fees but failed to do so”. The complaint alleges that the Defendants failed to ensure that Voya’s compensation was reasonable, despite the availability of lower-cost alternatives such as Fidelity, which charged as little as $14 per participant from 2017 onward.

The plaintiffs cite the defendants’ failure to act as prudent experts, which requires fiduciaries to discharge their duties with the care, skill, prudence, and diligence that a prudent person familiar with such matters would use. The complaint alleges that the defendants’ failure to monitor Voya’s fees or seek competitive bids violated this standard. “The duty to conduct an independent investigation into the merits of a particular investment is the most basic of ERISA’s investment fiduciary duties,” the complaint states. It further asserts that fiduciaries must ensure services are necessary and fees are reasonable under ERISA § 404(a)(1).

The complaint also highlights the defendants’ failure to control excessive expenses, which it alleges breached their duty of prudence. The plaintiffs contend that the defendants did not adequately monitor or control costs despite the availability of lower-cost alternatives. Sodexo, as the plan sponsor, had the authority to appoint and remove committee members and was aware of their fiduciary responsibilities, yet failed to ensure they fulfilled their duties.

The plaintiffs seek class certification and a declaration that the defendants breached their fiduciary duties. They also request recovery for the plan, including restoration of losses and disgorgement of profits. “The Plan and its participants have paid substantial excess fees during the Class Period, and suffered lost-opportunity costs,” the complaint alleges. It further claims that the defendants’ actions caused “millions of dollars of unreasonable and unnecessary monetary losses”.

Prohibited Transactions and Co-Fiduciary Liability

The complaint also alleges that the defendants caused the plan to engage in prohibited transactions by allowing Voya, a party in interest under 29 U.S.C. § 1002(14)(B), to receive excessive compensation. The plaintiffs contend that the defendants’ actions violated ERISA’s prohibitions on transactions involving parties in interest, as outlined in 29 U.S.C. § 1106(a)(1)(A), (C), and (D). Additionally, the complaint alleges that Sodexo knew of these breaches and failed to make any reasonable effort to remedy them, violating its duty to monitor other fiduciaries under ERISA § 405.

The complaint further asserts that Sodexo failed to monitor the Committee’s performance, breaching its co-fiduciary duties under ERISA § 405. Plaintiffs seek class certification, restitution of losses, disgorgement of profits, and removal of the Defendants from their fiduciary roles. The plaintiffs allege that Sodexo had the authority to appoint and remove Committee members and was aware of their fiduciary responsibilities, yet failed to ensure they acted prudently.

Legal Precedents and Industry Standards

The complaint cites several legal precedents and industry standards to support its allegations. In Tussey v. ABB, Inc. (2012), a trial determined that excessive 401(k) fees violated ERISA’s fiduciary duties. The Sacerdote v. New York University (2017) ruling addressed market rates for recordkeeping fees, while Cassell v. Vanderbilt University (2018) saw a motion to dismiss denied in a similar ERISA case. The complaint also references the Moitoso v. FMR LLC (2019) stipulated facts on Fidelity’s recordkeeping fees, which established benchmarks of $21 per participant in 2014, $17 per participant from 2015 to 2016, and $14 per participant from 2017 onward.

The complaint emphasizes that ERISA fiduciaries must ensure fees are "not more than reasonable" and avoid self-dealing. "The highest known to the law," the complaint describes ERISA fiduciary duties. It further alleges that the Defendants failed to act for the Plan’s exclusive benefit, approving excessive Voya compensation and impermissible payments to Sodexo. The Department of Labor warns that "the plan’s fees and expenses should be monitored to determine whether they continue to be reasonable," according to the complaint. The complaint also notes that large plans like Sodexo’s should negotiate lower per-participant recordkeeping fees due to economies of scale. Prudent fiduciaries, the complaint alleges, negotiate recordkeeping fees as a fixed per-participant amount, not a percentage of assets.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.