A federal judge has dismissed an excessive fee suit against Adidas that “contains no factual allegations surrounding defendant’s process for selecting and monitoring investments,” in Enos v. Adidas Am, in the U.S. District Court for the District of Oregon.
The case was dismissed because the Adidas plan participants filing the lawsuit failed to show how the company’s process for managing their retirement plan led them to pay higher fees or receive suboptimal investment returns.
The lawsuit had claimed that for between 2013 and 2017, the administrative fees charged to plan participants was “greater than a minimum of approximately 75 percent of its comparator fees when fees are calculated as cost per participant,” and that during that same period, “the administrative fees charged to Plan participants is greater than 80 percent of its comparator fees when fees are calculated as a percent of total assets.” The court state the allegations weren’t sufficient to sustain a claim for fiduciary breach under ERISA, in accordance with the standards outlined by the Chevron case.
Courts want more meat to the bones. Fee comparisons alone, won’t sustain a claim of a breach of fiduciary duty.
