MADISON, Wis.–A federal court in Wisconsin has denied a motion for class certification in a federal benefits lawsuit from former participants in 401(k) plan managed by the Credit Union Retirement Plan Association.
According to a copy of the ruling reviewed by CUToday.info, the court issued its ruling in the case after finding that three of the four participants in the $1.5 billion, multiple employer plan were not harmed.
The motion was denied in a 14-page order from U.S. District Judge James D. Peterson, who found the majority of the plaintiffs were charged fees that the proposed class contended were “reasonable.”
Peterson left standing one claim, that by plaintiff Brenda Lucero.
The Allegations
The case dates to 2022 and alleged that the Credit Union Retirement Plan Association—defined in the suit as a professional employer organization that offers its retirement plan to member organizations--has breached its fiduciary duty under the Employee Retirement Income Security Act.
Among the allegations were that it did not objectively and adequately review the plan's investment portfolio to ensure each option included fair costs. Lucero is also alleging CURPA had inadequate recordkeeping and let administration costs get out of control.
At the end of 2020, the plan had more than 20,000 participants.
‘Operated Differently’
"[F]or many ERISA plans, a claim regarding excessive fees would be an obvious candidate for class certification because the fees would be charged to all plan participants using the same formula,” the judge wrote. “But the plan in this case operated differently while plaintiffs were participants. Rather than applying a set fee schedule for all plan participants, plan administrators allowed individual employers to negotiate their own fees with the recordkeeper, resulting in disparate fees."
As an example, the suit notes one was charged a fee $10.01, while two others were charged as much as $471.53.
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