State Farm Investment Management Corp. is being sued overalleged excessive fees it charges on five of its proprietarytarget date funds.

The five products, which are part of State Farm’s branded“LifePath” series of target date funds, are managed by BlackRockFund Advisors.

More than $6.2 billion in assets are managed in the five fundsin question. Investors pay a total of about $39.2 million in feesfor all of the funds. About $21.7 million goes to BlackRock, andState Farm takes the rest, about $17.5 million, or 44 percent ofall fees investors pay to buy into the funds.

The suit, Ingenhutt et al v. State Farm InvestmentManagement Corp., which was filed in U.S. District Court forthe Central District of Illinois, is brought by two individualinvestors claiming that State Farm’s share of fees is toohigh.

The plaintiffs acquired the funds through IRAs, not definedcontribution plans.

Specifically, the plaintiffs allege that the amount paid toState Farm “is so disproportionately large that it bears noreasonable relationship to the services rendered (if any) inexchange for that fee,” according to court documents.

State Farm should not receive such a high portion fees, because“virtually all of the investment management functions” of the fundare delegated to Black Rock, allege the plaintiffs. Nor does StateFarm provide and “day to day investment services” to the fund, theyclaim.

The 28 basis points that State Farm claims in fees issubstantially more than other fund families, such as the JP MorganSmartRetirement Funds. The plaintiffs claim that given State Farm’slimited role in managing the assets, its share of the fees shouldbe closer to 2.4 basis points.

“In charging and receiving inappropriate compensation, and infailing to put the interests of plaintiffs and the othershareholder of the LifePath Funds ahead of its own interests,”State Farm Investment Management Corp. breached, and continues tobreach, its fiduciary duties under the Investment Company Act of1940, claim the plaintiffs.

The allegations are made against State Farm InvestmentManagement Corp., and not against BlackRock FundAdvisors.

Comments from counsel representing the plaintiffs and State Farmwere not available by press time.