A U.S. District Court judge in Los Angeles dismissed a complaint against the Trader Joe's grocery store chain by former employees and 401(k) plan participants, who alleged a series of ERISA violations by the company and its fiduciaries.
Among their complaints, the plaintiffs alleged plan managers allowed "unreasonable" record-keeping fees, failed to conduct a record-keeping RFP every three years and chose higher cost mutual fund shares when less expensive ones were available. The suit, which sought class-action status, was filed Dec. 30.
U.S. District Judge Percy Anderson dismissed the complaint April 24, writing that the plaintiffs had failed to provide sufficient facts to support their arguments in the case of Marks and Bowling vs. Trader Joe's Co.
For example, the "allegations regarding the allegedly excessive record keeping fees are insufficient to survive a motion to dismiss," he wrote.
As for the RFP claim, the complaint "simply recites legal conclusions and does not allege any facts that the plan fiduciaries could have obtained less expensive record-keeping services elsewhere through competitive bidding," he wrote.
As for the cost of share classes, plaintiffs "have alleged no specific facts" that plan executives breached their fiduciary duties by failing to offer institutional shares vs. investor class shares.
The judge said plaintiffs could file an amended complaint within 14 days.
The Trader Joe's Company Retirement Plan, Monrovia, Calif., had assets of $1.63 billion as of Dec. 31, 2018, according to court documents.