A U.S. District Court judge in St. Louis dismissed for a second time a lawsuit by two 401(k) plan participants against Olin Corp. and fiduciaries that claimed record-keeping expenses and investment selection practices violated ERISA.
The plaintiffs originally sued in November 2021, but U.S. District Court Judge Stephen R. Clark dismissed the complaint in June 2022 saying they didn't show that record-keeping fees were excessive and didn't provide adequate comparisons of the plan's investments vs. other investments.
Mr. Clark had given the plaintiffs a chance to file an amended complaint in Riley et a. vs. Olin Corp. et al. But when the plaintiffs, who were seeking class-action status, asked permission to file the amended complaint, the judge denied the request.
They argued that "comparable plans" cost less and provided "virtually identical services," Mr. Clark wrote Jan. 24 recapping their complaint. The plaintiffs "do not identify any of the specific services provided by any of the plans," he wrote.
"The plaintiffs still do not plausibly allege that the (plan's) investment committee improperly failed to conduct periodic requests for proposals and renegotiate the fees," Mr. Clark added. "In doing so, they fail to address previous shortcomings of the original complaint."
As for their contention that some plan funds performed worse than benchmark funds, the judge wrote that the plaintiffs "do not allege facts that render the comparator funds a meaningful benchmark."
Mr. Clark rejected the plaintiffs' argument that the plan should have examined offering collective investment trusts instead of mutual funds. "Mutual funds and collective trusts are not typical comparators or meaningful benchmarks," he wrote. "The plaintiffs point to no case where a court has found that collective-trust versions of a fund are a meaningful benchmark."
The Olin Corp. Contributing Employee Ownership Plan, Clayton, Mo., had $1.3 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.
