A federal court judge in Louisville, Ky., has denied a petition by Humana Inc. to dismiss an ERISA lawsuit by former employees alleging that the company and plan fiduciaries violated ERISA in the management of a 401(k) plan.
The plaintiffs complained that investment management fees for some mutual funds were higher than for fees in plans of a similar size. They also alleged that some of the mutual funds weren't in the lowest-fee share class. They also claimed that the plan's record-keeping fees were excessive, in the case of Moore et al. vs. Humana Inc. et al, filed in April 2021. The plaintiffs are seeking class-action status.
"These allegations are enough to survive a motion to dismiss because, if true, they could establish that the Committee failed to act as a prudent fiduciary," wrote U.S. District Judge Rebecca Grady Jennings on March 30, rejecting the motion to dismiss. The Humana Retirement Plans Committee, one of the defendants, manages the investment for the 401(k) plan.
"Because plaintiffs' breach of fiduciary duty claim remains, their failure to adequately monitor other fiduciaries claim remains as well," the judge wrote.
As of Dec. 31, 2020, the Humana Retirement Savings Plan had $6.3 billion in assets, according to its most recent Form 5500.