A federal court judge in Madison, Wis., has rejected a petition by the Credit Union Retirement Plan Association to dismiss a lawsuit by four former employees who said the multiemployer plan's executives and fiduciaries violated ERISA by charging excessive record-keeping and administrative fees paid by a 401(k) plan.
"On a motion to dismiss, the question is whether the plaintiffs provided defendants with fair notice of their claims and alleged facts plausibly suggesting that they are entitled to relief," U.S. District Judge James D. Peterson wrote on March 9. "The court concludes that the plaintiffs have met that standard on both claims."
The former employees sued in April 2022, seeking class-action status as they compared the plan's assets, fees and number of participants to six other plans.
"The plan could have obtained record-keeping services that were comparable or superior to the typical services provided by the plan's record keeper at a lower cost," they asserted in the case of Lucero et al. vs. Credit Union Retirement Plan Association et al.
The defendants told the judge the complaint should be dismissed, "contending that plaintiffs haven't alleged enough facts to support their claims," Mr. Peterson wrote.
Even though the defendants pointed out that the plaintiffs' compared a multiemployer plan to single-employer plans, "this argument cannot carry the day in the context of a motion to dismiss," the judge wrote.
"At the pleading stage, plaintiffs' burden is to allege facts that raise their right to relief 'above the speculative level,'" the judge wrote. "Plaintiffs have met that relatively low burden."
The Credit Union Retirement Plan Association 401(k) Plan, Madison, Wis., had assets of $1.78 billion as of Dec. 31, 2021, according to the latest Form 5500.