A federal District Court judge in San Francisco dismissed a lawsuit by participants in a 401(k) plan run by Salesforce.com who contended the company and its fiduciaries acted imprudently and violated ERISA in managing the plan.
One of the allegations in the lawsuit filed in March was that Salesforce.com fiduciaries should have considered offering passively managed mutual funds instead of actively managed ones for comparable investments.
"Plaintiffs fail to state an imprudence claim predicated on a comparison of actively and passively managed funds, U.S. District Court Judge Maxine M. Chesney, wrote in her Oct. 5 opinion.
The participants also argued that the fiduciaries failed to explore using lowest price share classes in the plan's investment lineup.
"The court is not persuaded by the reasoning," the judge wrote. "Accordingly, plaintiffs fail to state an imprudence claim predicated on a comparison of share classes."
The judge also rejected the plaintiffs' argument that fiduciaries should have chosen collective investment trusts and separate accounts instead of certain mutual funds, remarking again that they "failed to state an imprudence claim."
She wrote that plaintiffs could file an amended complaint, setting a deadline of Oct. 23.
The Salesforce 401(k) Plan, San Francisco, had $2 billion in assets as of Dec. 31, 2018, according to the latest Form 5500.
