A federal judge in Newark, N.J., has issued a split decision in an ERISA case involving Nokia of America Corp., allowing one allegations of 401(k) plan mismanagement to go to trial while dismissing another.
Participants sued in December 2021 saying the company and its fiduciaries violated ERISA by charging excessive record-keeping fees and retaining poor-performing investments. The plaintiffs, in the case of Seibert et al. vs. Nokia of America Corp. et al, are seeking class-action status.
U.S. District Court Judge Esther Salas on Aug. 8 rejected the defendants' request to dismiss the record-keeping allegation.
"While defendants argue that plaintiffs have failed to offer allegations about the scope or caliber of services being provided by the plan or comparator plans, the court disagrees," wrote the judge, conceding that "this issue is close."
At the motion-to-dismiss stage, the plaintiffs' allegations are sufficient that the Nokia 401(k) plan committee "failed to use its bargaining power to obtain services that were comparable to or superior to the typical services provided by the plan's record keeper at a lower cost," she wrote.
However, the judge supported the defendants by dismissing the plaintiffs' allegation that fiduciaries failed to adequately review the plan's investments and that the expense ratios for 17 investments were excessive.
As of Dec. 31, 2021, the Nokia Savings/401(k) Plan, Murray Hill, N.J., had $10.1 billion in assets, according to the most recent Form 5500 filing.