Quest Diagnostics Sued Over 401(k) Plan’s Target Date Fund Suite

A Quest Diagnostics Inc. employee filed a proposed class action claiming the company’s $5.6 billion 401(k) plan offers high-cost investments and an imprudent suite of actively managed target date funds from Fidelity, to the detriment of plan participants.

William Morales, a cytotechnologist who performs cancer screenings for Quest, accuses the medical laboratory company of filling its 401(k) plan with pricey share class mutual funds when the same investments were available at lower cost. Quest added lower-cost versions to the plan in 2016, but it failed to transfer participants into the cheaper options without their affirmative election, Morales said.

Morales’ complaint ...