The Register Citizen (Torrington, CT)
Xerox hit with retirement plan suit
With retirees nationally getting testier over what they see as cozy fee arrangements at their expense, Norwalk-based Xerox is the latest to be hit with a lawsuit over record-keeping fees it paid to a former affiliate.
Plaintiffs claim that the document management technology company overpaid by between $20 and $100 annually for administration of each retiree’s record in its plans. Added up, they allege that comes out to unspecified millions of dollars in excess fees annually from 2015 to the present that they say should have stayed in the accounts of retirees.
They are seeking class-action status for the lawsuit, filed Wednesday in New Haven federal court. A Xerox spokesperson declined comment Thursday on grounds the litigation remains pending. The company has yet to file a formal response in court.
Chris Carrigan, of Fairport, N.Y., is one of the three plaintiffs bringing the lawsuit, along with Michael Venti of Star, Idaho, and Sylvain Yelle of Suwanee, Ga. A partner with Garrison, LevinEpstein declined comment on behalf of the plaintiffs the New Haven law firm is representing.
Law firms have deluged courts nationally with similar complaints in the past several years, applying the Employment Retirement Income Security Act to the question of record-keeping fees. The U.S. Supreme Court added to its fall docket one such case on appeal involving Northwestern University.
Xerox has had its headquarters in Connecticut since 1969, initially in Stamford and in the past 14 years in Norwalk. The company has its largest work force at its historic base in the Rochester, N.Y., area.
Xerox spun off its Conduent services business in 2017 as an independent company based in New Jersey. In their lawsuit, plaintiffs say Conduent jacked up the fees it charged Xerox for records administration of retirement plans after taking over the duties, at as much as four times the record-keeping fees charged by other big companies like Fidelity and Vanguard. Plaintiffs accuse Xerox of having failed in its fiduciary duties to beneficiaries in not giving them better options.
CEO John Visentin has discussed at length his efforts to trim costs at Xerox, where he was installed as CEO in 2018 after activist investor Carl Icahn led a successful revolt against the company’s proposed sale to Fujifilm. After cutting 2,300 jobs last year to give it a work force of 24,700 people entering 2021, Xerox cut 400 more in the first six months of this year, paying out severance of $20 million.
Xerox profits totaled $91 million in the second quarter, up from $25 million a year earlier during the initial recovery period of the COVID-19 pandemic. Among several measures to conserve cash during the pandemic, Xerox suspended matching contributions to employee 401(k) retirement plans, anticipating $20 million in savings this year from the move.
The company lists pension obligations totaling $1.44 billion as of June, down $130 million from a year earlier.