A U.S. District Court judge in Providence, R.I., on Tuesday dismissed a fiduciary-breach lawsuit against CVS Health Corp., Woonsocket, R.I., and Galliard Capital Management by three participants in CVS' 401(k) and employee stock ownership plan.
The lawsuit, originally filed in February 2016 by three plan participants, charged that CVS breached its fiduciary duties because the plan's stable value fund, managed by Galliard, imprudently invested “too much of the plan's stable value fund assets in ultra-short-term cash management funds that provided extremely low investment returns,” according to the filing announcing the dismissal.
Judge Mary M. Lisi dismissed the suit, citing that the “fund was invested in conformance with its stated objective and whether that strategy was prudent cannot be measured in hindsight.”
As of Dec. 31, the 401(k) Plan and The Employee Stock Ownership Plan of CVS Health Corp. and Affiliated Cos. had $8.4 billion in assets, according to the company's most recent Form 5500 filing. The stable value fund as of that same date had $1.1 billion in assets.
CVS spokeswoman Carolyn Castel and attorneys for the plaintiffs could not be immediately reached to provide comment.