A U.S. District judge in Rochester, N.Y., refused to dismiss charges against two retirement plans run by Kaleida Health, filed by current and former participants who allege fiduciary breaches under the Employee Retirement Income Security Act.
"The court finds plaintiffs' allegations sufficiently state a breach of fiduciary duty claim," was a common response by U.S. District Judge Elizabeth A. Wolford, in rejecting on Monday a series of requests for dismissal by Kaleida Health, a Buffalo, N.Y, operator of hospitals and provider of health services.
Among their complaints, participants in the 401(k) and 403(b) plans criticized fiduciaries for offering some retail-priced funds vs. institutionally priced funds and failing to adequately monitor investments; and failing to minimize "reasonable" fees and expenses.
The complaint, which seeks class-action status, was filed in October, criticizing management of the two plans, which had nearly identical investment options.
The primary argument was that the plans' offered a target-date mutual fund series from T. Rowe Price, which charged fees that were higher than identical mutual funds, according to the complaint in Lutz et al. vs. Kaleida Health et al.
The Kaleida Health Savings/Investment 403(b) Plan had $444.8 million in assets and the Kaleida Health Savings/Investment 401(k) Plan had $81.4 million in assets, both as of Dec. 31, 2017, according to the latest Form 5500 filings.
