A federal judge in Minneapolis has issued a split decision in an ERISA lawsuit against Taylor Corp. and its fiduciaries, dismissing some allegations by five former 401(k) plan participants but allowing others to go to trial.
"Defendants' motion (to dismiss) will be granted for the most part, but not entirely," U.S. District Court Judge Eric C. Tostrud wrote Monday, in Fritton et al. vs. Taylor Corp. et al.
"Plaintiffs' expensive-share-class theory is plausible," Mr. Tostrud wrote, referencing allegations that plan executives could have offered the same investments in the plan lineup but at a lower price. He also allowed to proceed the plaintiffs' contention that company and plan executives failed to monitor fiduciaries.
"Plaintiffs allege that defendants selected for inclusion in the plan more expensive, individual share classes when they could have — and should have — selected lower cost, institutional share classes," the judge wrote. "Plaintiffs allege there is no difference between the classes other than cost, and a prudent fiduciary would switch to the less expensive share classes."
Mr. Tostrud dismissed ERISA-violation allegations of excessive record-keeping expenses, excessive management fees, an underperforming investment and fiduciaries placing their interests above those over those of participants.
The former participants sued in February 2022, seeking class-action status. The judge dismissed all allegations in December, but he gave plaintiffs 30 days to file an amended complaint.
Taylor Cos. 401(k) and Profit-Sharing Plans, North Mankato, Minn., had $947 million in assets as of Dec. 31, 2021, according to the latest Form 5500.