June 30, 2020, 10:23 PM; Updated: June 30, 2020, 11:33 PM
A former Paychex Inc. employee filed a suit in New York federal court Tuesday alleging the company breached its fiduciary duties under the Employee Retirement Income Security Act by selecting high risk, actively managed funds that were unsuitable for plan participants.
The proposed class action alleges Paychex selected a more costly, high-risk option from available target date funds managed by Fidelity Management & Research Company. The chosen fund takes levels of risk that render it unsuitable for the average retirement investor, the suit says.
Higher levels of risk in the funds exposed plan members to significant losses in downturns such...