A federal judge in Newark, N.J., ruled that an ERISA complaint against Automatic Data Processing Inc. and its retirement plan fiduciaries could go to trial after rejecting the defendants' request to dismiss all 12 allegations.
U.S. District Court Judge Esther Salas on Aug. 23 rejected the defendants' motion to dismiss regarding nine of the allegations. She dismissed two allegations and offered a split decision on another allegation.
Two participants in the ADP TotalSource Retirement Savings Plan, a 401(k) plan, filed a 152-page lawsuit in May 2020, accusing ADP and its fiduciaries of many ERISA violations.
The plan is a multiple employer plan, which is offered to employees in small and medium-size businesses, "whose employer has contracted with ADP to serve as its off-site human resources department," the original complaint said.
Participants are seeking class-action status in Berkelhammer et al. vs. Automatic Data Processing Inc. et al.
Among the allegations that the judge allowed to proceed to trial were claims of excessive record-keeping fees, retention of poor-performing investment options, excessive investment management fees and excessive managed account fees.
Ms. Salas also rejected motions to dismiss on four counts of breach of loyalty under ERISA, a legal term that covers self-dealing or benefiting parties at the expense of participants.
The judge gave plaintiffs 30 days to file an amended complaint to address the allegations that she dismissed. Ms. Salas wrote that her ruling was "not for publication," a legal term meaning her decision cannot be used as a precedent in other cases.
The ADP TotalSource Retirement Savings Plan, Miami, had $6.9 billion in assets as of Dec. 31, 2020, according to the latest Form 5500.
