The U.S. District Court for the Western District of Michigan granted Pfizer Inc.’s motion to dismiss a case that claimed that Pfizer paid “unreasonable” recordkeeping and administrative fees. U.S. District Judge Paul Maloney ruled that the plaintiff presented his case with a flawed methodology.
The complaint argued that plan participants should have received better rates for recordkeeping because of the plan’s large size. The Pfizer Savings Plan has more than $19 billion in assets and serves 56,648 participants, according to its latest Form 5500 filing.
It was alleged that plan participants paid, on average, $24 more in recordkeeping fees than they should have each year between 2017 and 2021.
Pfizer claimed that the Plaintiff didn’t use a proper methodology to establish his claims. The complaint had compared average fees paid over several years to just one year of a plan’s costs.
Pfizer’s motion to dismiss also argued that the plaintiff failed to allege that the plan fees were excessive relative to the service provided.
Also, Pfizer argued that Plaintiff failed to identify a comparable 401(k) plan that paid lower recordkeeping fees.
Again, federal courts are tired of these cases. Alleging a plan that should be cheaper isn’t proof enough of a fiduciary breach.
