CenturyLink successfully defended the class-action lawsuit filed against them.
A federal judge granted CenturyLink’s motion for summary judgment, finding that they didn’t violate ERISA. The plaintiffs alleged CenturyLink breached its fiduciary duty under ERISA by poorly designing and failing to monitor the large-cap fund used within the plan.
CenturyLink’s Dollars and Sense 401(k) Plan has assets of $5.1 billion with 43,000 participants at the end of 2018. The case was all about allegations that CenturyLink Investment Management Active Large Cap U.S. Stock Fund was imprudently designed.
The plaintiffs alleged the fund failed to keep pace with its benchmark, the Russell 1000 Stock Index. The fund used a multi-manager design, with portions of the assets managed by Cornerstone Investment Partners, Fiduciary Management, Ivy Investment Management Company, and Systematic Financial Management, the plaintiffs wrote in the complaint. Some of the assets were also invested in the T. Rowe Price Institutional Growth Fund and the State Street Global Advisors Russell Large Cap Index Fund, according to the complaint.
The court didn’t want to second guess CenturyLink and it’s clear that lagging returns isn’t enough to show that there is a breach of a plan sponsor’s fiduciary duty.