Allegations of ERISA violations against Centene Corp. and its retirement plan fiduciaries were dismissed because plaintiffs failed to support their lawsuit with sufficient facts, a federal judge in St. Louis ruled.
Two former employees sued the health-care services company in February 2022 alleging that the company’s 401(k) plan charged excessive record-keeping fees, failed to monitor the fiduciaries, offered investment options with excessive expense ratios and failed to replace poor-performing investments.
The ex-employees, who later amended their complaint and added three more plaintiffs, sought class-action status in Williams et al. vs. Centene Corp. et al.
U.S. District Court Judge Sarah E. Pitlyk rejected all of their arguments March 31.
“Defendants argue that none of plaintiffs’ … theories adequately supports their breach-of-fiduciary-duty claim,” Ms. Pitlyk wrote. “The court agrees.”
The plaintiffs’ reliance on comparing Centene’s investment and management fees to industry medians and averages “is misplaced,” the judge wrote, adding that this complaint “fails to state a breach-of-fiduciary-duty claim under an excessive-investment-fees theory.”
A similar lack of a “meaningful benchmark” prompted Ms. Pitlyk to reject the plaintiffs’ allegations of an ERISA violation based on the plan’s total cost.
The judge also said plaintiffs didn’t provide sufficient factual support for their claim of excessive record-keeping fees, concluding that she “may not draw the reasonable inference that the investment committee allowed plaintiffs to pay excessive fees.”
As for the assertion of poor-performing investments, “plaintiffs’ allegations do not provide a meaningful benchmark on the basis of which the court could evaluate the plausibility of their claim,” Ms. Pitlyk wrote.
Centene Management Corp. Retirement Plan, St. Louis, had $3.7 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.