A federal judge in New York on Tuesday dismissed a lawsuit against Advance Publications Inc. by a former employee who accused its 401(k) plan managers of violating ERISA by offering a target-date series from BlackRock.
The lawsuit is one of 11 filed against different sponsors, making the same claim that the BlackRock LifePath Index Retirement Funds target-date series should have been removed from investment lineups due to alleged poor performance.
BlackRock isn't a defendant in any of the cases in which plaintiffs are represented by the Miller Shah law firm as lead counsel or co-counsel. Advance Publications is the parent company of Conde Nast.
Federal judges have dismissed similar complaints twice each against Microsoft Corp., Booz Allen Hamilton Inc. and Capital One Financial Corp.
Plaintiffs in the latter two cases filed notices of appeal, then withdrew the appeals.
In the Advance Publications case, the former employee argued that the sponsor breached its duty of prudence and duty of loyalty under ERISA, with the first allegation covering the target-date series costs and performance and the second allegation saying the sponsor put its own interests above those of participants.
Because the plaintiff didn't provide enough facts to support the breach of loyalty complaint, U.S. District Court Judge Analisa Torres dismissed the allegation in Anderson vs. Advance Publications Inc.
As for the duty of prudence argument, "the court concludes that it does not contain sufficient factual allegations to state a claim" under ERISA, Ms. Torres wrote.
"In so many words, plaintiff alleges that the BlackRock TDFs underperformed," the judge wrote. "Allegations of underperformance are insufficient to support plaintiff's cause of action for breach of the duty of prudence."
The plaintiff, who is seeking class-action status, sued in August 2022 and filed an amended complaint in January 2023.
Ms. Torres ruled that the plaintiff could amend his complaint, setting a June 27 deadline.
Advance 401(k) Plan, New York, had $1.7 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.
