A federal judge in White Plains, N.Y., has dismissed for a second time an ERISA lawsuit by a participant in the USI Insurance Services 401(k) plan who contended record-keeping expenses were excessive.
Plaintiff "fails to sufficiently plead" that the record keeper charged excessive fees or that the fees were "excessive or unreasonable" compared with record keepers of similar size providing similar services, wrote U.S. District Court Judge Nelson S. Roman on Dec. 12.
The plaintiff argued that USI Insurance Services' hiring of a wholly owned subsidiary, USI Consulting Group, as the record keeper violated ERISA's duty of loyalty guidelines, which say fiduciaries cannot put their interests ahead of participants' needs. Roman rejected the allegation.
The judge said the plaintiff cannot allege excessive record-keeping fees against a benchmark of other comparable plans "when the plaintiff fails to identify a reliable benchmark," Roman wrote in Cunningham vs. USI Insurance Services et al. The plaintiff is seeking class-action status.
The plaintiff first sued in March 2021. Roman dismissed the lawsuit in March 2022, allowing the plaintiff to file an amended complaint. The judge wrote Dec. 12 that the plaintiff could file a second amended complaint by Feb. 6.
USI 401(k) Plan, Valhalla, N.Y., had $1 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.
