A federal judge in Phoenix rejected a petition by Stantec Consulting Services Inc. to dismiss allegations of ERISA violations in the management of its 401(k) plan by two former employees who are former plan participants.
The plaintiffs argued that plan fiduciaries failed to investigate whether lower-priced mutual fund shares were available and allowed investment fees to be higher than those of comparable funds. They said defendants should have offered collective investment trusts instead of certain comparable mutual funds, alleging the former were cheaper, in a complaint filed in September 2020.
The plaintiffs also argued that record-keeping fees were excessive in the case, Samantha Gotta et al. vs Stantec Consulting Services Inc. et al., and are seeking class-action status.
"Taken as true, these allegations sufficiently state a claim of breach of fiduciary duty," Chief U.S. District Court Judge G. Murray Snow wrote on May 18. "Plaintiffs' claim is not defeated by their failure to allege which processes led to a breach of fiduciary duties."
The Stantec 401(k) Plan, Chandler, Ariz., had $1.4 billion in assets as of Dec. 31, 2019, according to the latest Form 5500.