A federal court judge in Indianapolis has dismissed a lawsuit against Eli Lilly and Co. and 401(k) plan fiduciaries by an employee who alleged multiple ERISA violations in plan management.
"The court rejects the notion that Ms. Probst's allegation that Lilly did not conduct competitive biddings (for record-keeping services) is sufficient to state a claim for breach of duty of prudence," U.S. District Court Judge Jane E. Magnus-Stinson wrote in her Feb. 3 ruling in the case of Jennifer M. Probst vs. Eli Lilly and Co. et al.
Ms. Probst filed her initial complaint in May 2022 seeking class-action status, claiming ERISA violations started in May 2016 and are continuing through the date of judgment.
The judge rejected the plaintiff's effort to show that Lilly's record-keeping costs were higher than those of 13 other plans of varying asset sizes and numbers of employees.
"These allegations are wholly conclusory and do nothing to identify what types of services comparator plans received relative to the (Lilly) plan," the judge wrote. "Clear inconsistencies make her allegations implausible."
The judge also rejected the allegation that the defendants breached their ERISA duty of loyalty — a claim that suggests they acted to benefit themselves rather than the participants.
Ms. Probst claimed that Lilly provided some services that were duplicative of its record keeper, Alight Solutions, which isn't a defendant. Her complaint, citing allegedly excessive record-keeping fees, called on the defendants to remove Alight.
The plaintiff "does not allege what types of services Lilly employees provided to the plan, so she has not plausibly alleged that they were duplicative of the services provided by Alight or that they did not provide any value to the plan," the judge wrote.
The judge also rejected the plaintiff's argument that the defendants failed to monitor other fiduciaries. Since the judge rejected the other allegations, she rejected this one because it relied on the court agreeing with those other allegations.
The Lilly Employee 401(k) Plan, Indianapolis, had assets of $9.73 billion as of Dec. 31, 2021, according to the latest Form 5500.
