A federal court judge in Tampa, Fla., rejected an effort by TriNet Group Inc. to dismiss a lawsuit by former employees that fiduciaries of two TriNet 401(k) plans violated ERISA rules.
Participants alleged the two 401(k) plans' fiduciaries failed to reduce costs of investment options anddid not find better performing investments in the case of Huang et al. vs. TriNet HR III Inc., TriNet HR IV Inc. et al. Plaintiffs also criticized fiduciaries' management of record-keeping services and fees.
The initial complaint was filed in September 2020, and it was amended 12 months later.
"In sum, the thrust of defendants' motion to dismiss is that plaintiffs' claims are factually incorrect or rely on inapt comparators and that it complied with all of its statutory obligations under ERISA," wrote U.S. District Court Judge Virginia M. Hernandez Covington on Monday in addressing plaintiffs' allegations of high fees and poor-performing investments. "Such factual disputes are better resolved at a later stage of the litigation," the judge wrote.
As for challenging plaintiffs' complaint that fiduciaries failed to "prudently manage" record-keeping fees, the judge rejected the defendants' response. "These arguments, once again, raise factual questions that are not appropriate for this court to resolve at the motion to dismiss stage," she wrote.
TriNet is a professional employer organization that provides employee benefits and human resources services to small and medium-sized business. The TriNet 401K Plan and the TriNet Select 401(k) Plan , both of Bradenton, Fla., had aggregate assets of $6.74 billion as of Dec. 31, 2020, according to the most recent Form 5500s.