The plaintiff, who was seeking class-action status, also alleged that two mutual funds were both high cost and poor-performing. The judge dispatched the allegations about the two funds, writing that "because plaintiff has failed to allege facts plausibly showing that the challenged investment funds were imprudently selected or retained, her claim on this basis is dismissed."
As for the allegation that an actively managed target-date series violated ERISA due to its cost and performance, the judge noted that the argument was "even less plausible when considering the undisputed fact that, by 2021, the (target-date series) had outperformed plaintiff's chosen benchmark on a five-year trailing basis."
The plaintiff used the 2015-2020 period to make her claim. "Put simply, if imprudence may be inferred from a fund's underperformance over a given time period, it stands to reason that outperformance of the same fund over the same length of time just one year later would weaken, if not negate, such an inference," the judge wrote.
The Catholic Health Initiatives 401(k) Plan, Erlanger, Ky., had assets of $4.5 billion as of Dec. 31, 2019, according to the most recent Form 5500.