A federal judge in Chicago has dismissed for a second time an ERISA lawsuit filed by seven participants in an Exelon 401(k) plan accusing plan executives of allowing high fees, poor-performing investments and expensive advisory services.
As he did in his September 2022 dismissal of the original lawsuit, U.S. District Court Judge John Robert Blakey criticized the plaintiffs' amended complaint for incomplete and/or nonexistent factual support that the Exelon plan's products and services were worse than an assortment of comparisons.
Plaintiffs had challenged a target-date series, a domestic equity fund, an international equity fund and a fixed-income option as they sought class-action status in the case of Baumeister et al. vs. Exelon Corp. et al. The original suit was filed in December 2021.
Analyzing each investment and the comparisons offered by the plaintiffs, the judge ruled that none of the allegations demonstrated a breach of prudence as defined by ERISA.
As for record keeping, "the court cannot draw any reasonable inference regarding whether the plan's total record-keeping fees were excessive compared to any of the proposed comparators' total fees," he wrote.
The judge also dismissed the complaint about Edelman Financial Engines, the plan's managed accounts provider. "Plaintiffs fail to allege facts sufficient to demonstrate that the fee Financial Engines charge for managed account services was excessive," he wrote. Edelman Financial Engines isn't a defendant. The judge added that plaintiffs could file another amended complaint by Oct. 20.
The Exelon Corp. Employee Savings Plan had assets of $11.6 billion as of Dec. 31, 2021, according to the latest Form 5500.