A federal judge in Allentown, Pa., has dismissed an ERISA complaint against the retirement committee of B. Braun Medical Inc., saying the fiduciaries of the company's 401(k) plan acted properly in managing the plan.
"The committee indeed engaged in objectively prudent conduct in its monitoring and handling of the plan's investment funds and recordkeeping expenses," U.S. District Court Judge Edward G. Smith wrote on Aug. 18.
"Likewise, the court finds that the plan's investment fund options and recordkeeping expenses were objectively prudent" during the period that plaintiffs alleged the ERISA abuses took place, the judge wrote.
Former employees sued the retirement committee, the company and the board of directors in August 2020, alleging the defendants violated ERISA by failing to investigate or select lower cost investments, failing to monitor or control record-keeping expenses and acting in their interests over those of participants. Plaintiffs sought class-action status in the case of Nunez et al. vs. B. Braun Medical Inc. et al. In June 2021, the judge dismissed some allegations and most defendants, leaving only the retirement committee as a defendant and allegations of imprudence in investment selection and record-keeping expenses for trial.
The judge subsequently held a three-day bench trial in mid-July 2023.
"The committee's monitoring and selection process was reasonably prudent (because) the committee met regularly to evaluate the plan's investment options," the judge concluded. "Moreover, the committee relied on advisors and watchlists to ensure that the plan's investment options were not underperforming, even voting to remove funds that were." As for record keeping, "the committee's process of monitoring recordkeeping fees and selecting a new recordkeeper was reasonably prudent," he wrote. "The committee clearly negotiated down the plan's recordkeeping fees per participant on numerous occasions (and) also regularly utilized third-party consultants to benchmark the plan's recordkeeping fees."
B. Braun Medical Inc. Savings Plan, Bethlehem, Pa., had $906 million in assets as of Dec. 31, 2021, according to the latest Form 5500.