1:22-cv-02188
D. Colo.Sep 25, 2024Background
- Plaintiffs, former and current participants in the TTEC Services Corporation 401(k) Plan, brought a class action alleging breaches of fiduciary duty under ERISA.
- TTEC’s 401(k) Plan, one of the country’s largest, had over 27,000 participants and $285 million in assets in 2022.
- Plaintiffs allege TTEC failed to monitor, benchmark, and negotiate reasonable recordkeeping fees, resulting in participants paying excessive annual fees for administrative and recordkeeping services.
- Plaintiffs compared TTEC’s Plan fees to those of the Bricklayers and Trowel Trades’ International Retirement Savings Plan, which they claim offered the same services at a much lower fee.
- The Court had previously dismissed Plaintiffs’ first amended complaint, but allowed amendment following new guidance from the Tenth Circuit (Matney). Defendants moved to dismiss the second amended complaint.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Adequacy of Complaint under Rule 12(b)(6) | Sufficient facts plausibly allege excessive recordkeeping fees | Plaintiffs’ allegations still fail to meet pleading standards | Plaintiffs met the pleading burden; motion to dismiss denied |
| Appropriateness of Comparator Plan | Bricklayers Plan offers a meaningful, like-for-like benchmark | Bricklayers Plan is not comparable due to structural differences | Bricklayers Plan is a meaningful benchmark for this stage |
| Relevance of Industry Averages (401(k) Averages Book) | Averages and other precedents also show TTEC’s fees are excessive | Industry-wide averages are not sufficient for meaningful benchmark | Court disregards averages as conclusory, not specific enough |
| Sufficiency of Single-Year, Single-Plan Comparison | Comparison appropriate—with similar plan size/assets/services | One plan, one year insufficient for class-wide excessive fee claim | Sufficient at pleading stage, but tailored discovery suggested |
Key Cases Cited
- Matney v. Barrick Gold of North America, 80 F.4th 1136 (10th Cir. 2023) (sets standard requiring a ‘meaningful benchmark’ in ERISA excessive fee claims)
- Tibble v. Edison International, 575 U.S. 523 (2015) (recognized continuing duty to monitor plan investments and fees)
- Smith v. CommonSpirit Health, 37 F.4th 1160 (6th Cir. 2022) (plaintiff must show fees excessive in relation to services provided)
- Matousek v. MidAmerican Energy Co., 51 F.4th 274 (8th Cir. 2022) (comparators must provide same services for valid benchmark)