A federal judge in Birmingham, Ala., rejected for the second time a petition by BBVA Compass Bancshares to throw out an ERISA complaint by current and former participants in the bank's 401(k) plan.
"The court denies BBVA's motion for the court to alter its order denying BBVA's motion to dismiss for failure to exhaust administrative remedies," U.S. District Judge Madeline Hughes Haikala wrote in her Feb. 19 opinion.
The plaintiffs sued the bank in July 2019, alleging that plan fiduciaries violated ERISA by choosing higher cost investments when similar lower-cost investments were available, in the case of Ferguson and McClinton vs. BBVA Compass Bancshares Inc. et al.
They also complained that fiduciaries should have looked beyond offering a money market fund as a capital preservation vehicle because low interest rates suppressed returns.
In May 2020, the judge declined to dismiss the complaint, rejecting the bank's contention that the plaintiffs hadn't pursued all administrative remedies before filing the lawsuit.
The Compass SmartInvestor 401(k) Plan, Birmingham, Ala., had $1.13 billion in assets as of Dec. 31, 2019, according to the latest Form 5500.
