A U.S. District Court judge in Los Angeles dismissed claims by participants in the AT&T Retirement Services Plan, Dallas, that plan fiduciaries failed, among other things, to use the plan's large size to "obtain reasonable" record-keeping fees and failed to monitor its record keeper's total compensation leading to "unreasonable administrative expenses."
Chief U.S. District Judge Virginia A. Phillips dismissed the suit on July 18, saying she was "not satisfied" that the complaint "properly alleges standing and timeliness" of the participants' arguments. She gave plaintiffs until July 30 to file an amended complaint against executives of the plan that had $38.6 billion in assets as of Dec. 31, according to the company's latest 11-K filing. The ruling in Alas et al. v. AT&T Inc. et al. noted the parties agreed on Dec. 21, 2017, that the corporate parent be dismissed as a defendant.
The judge rejected the participants' allegation that the AT&T plan should have included institutionally priced investments in the plan's self-directed brokerage account. The plaintiffs, she wrote, failed to show any financial losses based on such investments. The fact that only one of the plaintiffs was enrolled in the self-directed brokerage "is not sufficient to support a plausible inference that he suffered an injury," she wrote.
The judge also noted plaintiffs had argued that the plan's Form 5500s were not distributed to them. "Plaintiffs do not and cannot dispute that such documents were indeed publicly available" in a timely manner. The Form 5500s "form the basis" for the record-keeping and self-directed brokerage arguments, the judge wrote, adding the complaint "lacks any allegation regarding when plaintiffs discovered defendants' alleged misconduct."
Robert Steyer is a reporter at InvestmentNews' sister publication Pensions & Investments.