A federal judge in Indianapolis rejected a petition by ATH Holding Co., the parent company of health insurer Anthem Inc., to dismiss claims by participants that fiduciaries of the Anthem 401(k) Plan violated their ERISA duties in managing the plan.
Plaintiffs filed claims against the Anthem 401(k) fiduciaries alleging, among other things, that the plan managers failed to explore capital preservations alternatives to a money market fund and paid "unreasonable" investment management fees and administrative fees to record keeper Vanguard Group.
The defendants' primary argument was that most of the claims were made beyond a statute of limitations mandated by the Employee Retirement Income Security Act.
However, U.S. District Judge Tanya Walton Pratt rejected all of the defendants' arguments, denying their motion for summary judgment on Jan. 30 in the case of Bell et al. vs. Pension Committee of ATH Holding Co. LLC et al. Vanguard isn't a defendant.
The lawsuit was originally filed in December 2015; some complaints were dismissed in March 2017.
Regarding the money market fund complaints, Ms. Pratt wrote that the three-year statute of limitations didn't apply. Although participants received information on why the plan chose a money market fund vs. other options, "they were not informed of how those options were chosen nor that there may (have been) lower-cost or higher-yield alternatives that the plan did not offer," Ms. Pratt wrote.
As for the excessive fee complaints, Ms. Pratt wrote that although participants received some information about fees, they didn't receive enough. "The generic plan information defendants rely on to impute knowledge to the plaintiffs did not disclose that identical lower-cost alternative fee structures may be available," she wrote.
The Anthem 401(k) Plan, Indianapolis, had assets of $7.1 billion as of Dec. 31, 2017, according to the latest Form 5500.