A federal judge in Burlington, Vt., has rejected a request by the University of Vermont Medical Center Inc. to dismiss an ERISA complaint by a former 403(b) plan participant who criticized the plan for high record-keeping expenses, retention of poor-performing investments and failure to evaluate or monitor costs of self-directed brokerage services.
"The complaint meets plausibility standards because it alleges a breach of the statutory duty of care through fees that appear on the face of the complaint to exceed those paid by many similar institutions," Chief U.S. District Court Judge Geoffrey W. Crawford wrote on Jan. 30 in the case of Tyler Baker vs. University of Vermont Medical Center et al.
Baker sued in May 2023, seeking class-action status and alleging that plan fiduciaries failed to take advantage of the plan's size to negotiate better investment management fees, while allowing excessive record-keeping fees.
Defendants wrote that the plaintiff lacked standing to sue because he didn't invest in options that he criticized in the lawsuit. "The court concludes that plaintiff has standing to bring those challenges even if he did not invest in all funds within the plan," the judge wrote.
The University of Vermont Medical Center 403(b) Plan, Burlington, Vt., had $1.65 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.