On September 21, 2021, a District Judge in the United States District Court for the Middle District of North Carolina ruled that an ERISA class action lawsuit against IQVIA, Inc., the Board of Directors of IQVIA Holdings, Inc., and its Investment Benefits Committee (collectively, “IQVIA” or “Defendants”), was fit to proceed, denying IQVIA’s effort to dismiss the suit.
IQVIA is the plan sponsor for the IQVIA 401(k) Plan (the “Plan”). With over $1.6 billion in assets, the Plan is one of the largest defined contribution retirement plans in the United States. Importantly, large plans like the Plan have substantial leverage to negotiate for lower fees and expenses charged against plan participants’ investments.
Defined contribution plans, such as 401(k) plans, are governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), a federal statute establishing standards for plan administrators to ensure that investments offered to employees are prudently selected and monitored. Plaintiffs, represented by Miller Shah LLP, allege that IQVIA breached its fiduciary duties under ERISA by: (1) failing to fully disclose the expenses and risk of the Plan’s investment options to participants; and (2) selecting, retaining, and otherwise ratifying high-cost and poorly-performing investments instead of offering more prudent alternatives when such prudent investments were readily available at the time that they were chosen for the Plan and throughout the relevant period.
Specifically, Plaintiffs contend that the actively managed Fidelity Freedom Funds, the Columbia Acorn USA Fund, and the Prudential Jennison Mid Cap Growth Fund were—and continue to be—imprudent investments that should not have been offered to Plan participants.
IQVIA filed a motion to dismiss the legal action on December 8, 2020, arguing that Plaintiffs failed to state a claim upon which relief can be granted and offered no facts that plausibly show Defendants employed a deficient process for managing the plan. Furthermore, Defendants argued that the Plan contains popular investment options within an acceptable fee range (0.035-1.07%).
On September 21, 2021, the Court denied all three counts of IQVIA’s Motion to Dismiss, citing ERISA actions Reed v. MedStar Health, Inc. et al. and Jones v. Coca-Cola Consolidated, Inc. et al. in the process.
An update to this lawsuit can be found here. The case caption is Dearing et al v. IQVIA, Inc. et al., No. 1:20-cv-00574-WO-JEP, filed in the Middle District of North Carolina.
The legal team at Miller Shah LLP has significant experience representing ERISA matters. If you have any questions regarding this subject or this post, please contact Alec Berin (email@example.com) or Jonathan Dilger (firstname.lastname@example.org). The firm can also be reached toll-free at (866) 540-5505.
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