A federal court judge in St. Paul, Minn., issued a split decision in an ERISA lawsuit against CentraCare Health System, dismissing most allegations but allowing one complaint to stand.
U.S. District Court Judge Wilhelmina M. Wright issued the ruling Jan. 27 in Schave vs. CentraCare Health System et al. in which a former employee accused the company and fiduciaries of two retirement plans of several ERISA violations. The employee, who participated in both a 403(b) plan and 401(k) plan, is seeking class-action status.
"When an ERISA plaintiff's allegations support a plausible inference of mismanagement, dismissal is not warranted merely because the defendant has identified an alternative plausible inference," Ms. Wright wrote in rejecting the defendants' motion to dismiss the complaint that the plans failed to choose lower-cost share classes for some investments.
However, the judge sided with the defendants on several other issues, agreeing to dismiss complaints about ERISA violations due to alleged excessive management fees, poor investment performance and improper revenue sharing, all of which were part of the original lawsuit filed in June 2022.
CentraCare Health System 403(b) Plan, Saint Cloud, Minn., had $763 million in assets as of Dec. 31, 2019, according to the most recent Form 5500. The plan was frozen effective Jan. 1, 2021, according to the original lawsuit. The CentraCare Health System Retirement Plan, Saint Cloud, Minn., had $923 million in assets as of Dec. 31, 2021, according to the latest Form 5500.
