Capital One Financial Corp. asked a U.S. District Court judge in Alexandria, Va., to dismiss an ERISA complaint, saying the lawsuit filed by a 401(k) plan participant “does not include any allegations regarding the actual process” used by the trustees of the plan and “is based on only a small handful of circumstantial assertions”.
The company filed its response March 13 to a lawsuit filed December 31 by a former employee who alleged the plan’s trustees failed to control record-keeping costs and failed to “objectively and adequately review the plan’s investment portfolio” regarding overall costs.
“The complaint’s criticism of the plan’s alleged record-keeping fees creates no plausible inference of recklessness,” said the company’s response in Raul Morales v. Capital One Financial Corp. et al. “Plaintiff cannot state a claim alleging that a few plans paid less in recordkeeping fees.”
The company disputed the plaintiff’s claims of relatively high fees, noting that “they do not take into account services provided” by other plans.
The Capital One document pointed out that the Department of Labor’s guidelines for ERISA do not require trustees to choose the least expensive provider, adding that the DOL says cost is only one factor in selecting providers. a Registrar by a DC Regime.
The plaintiff, seeking class-action status, complained not only about allegedly high record-keeping fees, but also that several funds in the investment lineup “were more expensive than comparable funds found in planes of similar size”. The allegations affect plan participants as of December 31, 2015, according to the complaint. The associated savings plan of Capital One Financial Corporation, McLean, Virginia, had $7.9 billion in assets as of December 31, 2020, according to the latest Form 5500.