A federal judge in New York dismissed a lawsuit against Montefiore Medical Center by former employees who said the Bronx, N.Y., hospital and its fiduciaries mismanaged a 403(b) plan in violation of ERISA.
The plaintiffs alleged that record-keeping expenses were excessive compared to similar plans and that the plan offered higher-cost share classes for certain investment options when lower-cost ones were available in the marketplace.
U.S. District Judge John G. Koeltel rejected all of the allegations on Nov. 13 in the case of Boyette et al. vs. Montefiore Medical Center et al. The plaintiffs sued in June 2022, seeking class-action status.
The record-keeping complaint was dismissed because plaintiffs failed to show what they individually paid in record-keeping fees, which meant "they cannot allege that the fees they paid were unreasonable or outside the range of reasonableness," the judge wrote.
Since they couldn't show a "cognizable injury," they lacked standing to sue about record keeping, he added.
"The plaintiffs also lack standing with respect to their claims challenging the funds that charged excessive expense ratios, because the plaintiffs did not invest in these funds," he wrote.
The judge gave the plaintiffs 30 days to amend their complaint.
Montefiore Medical Center 403(b) Plan, Bronx, N.Y., had $3.3 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.
