They say that April showers bring May flowers, but there were no flowers for ERISA plan sponsors and fiduciaries on May 1 when the Second Circuit held, in a ruling that provoked a vigorous dissenting opinion, that an ERISA...more
The Second Circuit recently held that in order to state a claim for a prohibited transaction pursuant to ERISA section 406(a)(1)(C), it is not enough to allege that a fiduciary caused the plan to compensate a service provider...more
A recent Ninth Circuit decision has generated considerable controversy amongst employee benefits practitioners by holding that plan fiduciaries engaged in prohibited transactions when they amended the plan’s existing...more
9/22/2023
/ 401k ,
Benefit Plan Sponsors ,
Breach of Duty ,
Class Action ,
Compensation ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Investment Adviser ,
Real Party in Interest ,
Recordkeeping Requirements ,
Service Agreements
We have previously blogged on the flurry of class action lawsuits challenging 401(k) plan investments in the BlackRock LifePath Index Target Date Funds. District courts around the country—seven of them in total—have granted...more
In a case of first impression in the Tenth Circuit, the Court recently joined the chorus of circuit courts in holding that a 401(k) plan participant alleging excessive investment management or recordkeeping fees must assert a...more
On remand from the U.S. Supreme Court, the Seventh Circuit issued its opinion in Hughes v. Northwestern University, concluding that participants in two Northwestern 403(b) plans plausibly pled fiduciary-breach claims based on...more
4/4/2023
/ 403(b) Plans ,
Breach of Duty ,
Class Action ,
Employee Retirement Income Security Act (ERISA) ,
Excessive Fees ,
Fiduciary Duty ,
Hughes v. Northwestern University ,
Investment Management ,
Northwestern University ,
Pleading Standards ,
Recordkeeping Requirements ,
SCOTUS
The filing of a new 401(k) plan “excessive fee” or “investment underperformance” complaint is hardly “news” these days given the proliferation of suits that have been filed over the past several years. In fact, hardly a week...more
The Seventh Circuit recently provided a ray of sunshine in what has largely been a gloomy stretch for plan sponsors and fiduciaries defending ERISA breach of fiduciary duty claims based on allegedly excessive investment and...more
9/8/2022
/ 401k ,
Benefit Plan Sponsors ,
Breach of Duty ,
Class Action ,
Dismissals ,
Employee Retirement Income Security Act (ERISA) ,
Fees ,
Fiduciary Duty ,
Hughes v. Northwestern University ,
Motion for Summary Judgment ,
SCOTUS
Since the Supreme Court’s ruling in Fifth Third Bancorp v. Dudenhoeffer, courts around the country have overwhelmingly rejected ERISA fiduciary-breach claims by 401(k) plan participants seeking relief related to investments...more
In April, we wrote here about the discouraging trend of opinions allowing commonly asserted breach of fiduciary duty claims in 401(k) and 403(b) plan investment litigation to survive motions to dismiss. While it may be too...more
7/6/2022
/ 401k ,
403(b) Plans ,
Breach of Duty ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Hughes v. Northwestern University ,
Investment Management ,
Management Fees ,
Motion to Dismiss ,
Retirement Plan
Albert Einstein is famously credited with saying, "Insanity is doing the same thing over and over and expecting different results." This adage comes to mind as defense counsel continue to resort to the same strategies for...more
4/28/2022
/ 401k ,
403(b) Plans ,
Compensation & Benefits ,
Defense Strategies ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Excessive Fees ,
Fiduciary Duty ,
Plausibility Standard ,
Retirement Plan ,
Share Classes
On Friday, for the second week in a row, the Ninth Circuit reversed dismissal of a 401(k) plan excessive fee litigation challenging the offering of retail share classes of mutual funds instead of cheaper institutional share...more
4/19/2022
/ 401k ,
Dismissals ,
Employee Benefits ,
Excessive Fees ,
Financial Services Industry ,
Investment Adviser ,
Mutual Funds ,
Retirement Plan ,
Reversal ,
Share Classes ,
Trader Joes
On Friday, the Ninth Circuit became the first circuit court to rule in a 401(k) plan fee and investment litigation following the Supreme Court’s January 2022 decision in Hughes v. Northwestern University, 142 S. Ct. 737...more
4/12/2022
/ 401k ,
Breach of Duty ,
Employee Benefits ,
Fees ,
Fiduciary Duty ,
Investment Management ,
Motion to Dismiss ,
Mutual Funds ,
Retirement Plan ,
Salesforce ,
Share Classes
A South Carolina federal district court denied plaintiffs’ demand for a jury trial in an ERISA fiduciary-breach action. The court held that, because federal courts in the Fourth Circuit and elsewhere have consistently held...more
The Sixth Circuit, in a split decision, held that a dispute between a union and an employer regarding retiree healthcare benefits was not arbitrable because the issue of retiree healthcare benefits was not encompassed within...more
On April 1, 2021, the Ninth Circuit became the third circuit court to conclude that a forum-selection clause in an ERISA 401(k) plan is enforceable. The Ninth Circuit thus denied a petition for mandamus seeking to overturn a...more
4/7/2021
/ 401k ,
Breach of Duty ,
Corporate Counsel ,
Duty of Loyalty ,
Duty of Prudence ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Forum Selection ,
Prohibited Transactions ,
Putative Class Actions ,
Retirement Plan ,
Venue ,
Writ of Mandamus
Whether a one-time payment of benefits constitutes an employee benefit plan under ERISA has been the source of some consternation in the courts for many years. The Fifth Circuit, in Atkins v. CB&I, LLC, recently had occasion...more
On March 10, 2021, the U.S. Department of Labor (the “DOL”) issued a statement that it intends to revisit its final rules issued late last year on “Financial Factors in Selecting Plan Investments” (summarized here) and...more
In a unanimous (8-0) opinion authored by Justice Sotomayor, the U.S. Supreme Court held that an Arkansas state law regulating rates at which pharmacy benefits managers (PBMs) reimburse pharmacies is not preempted by ERISA. ...more
Among the many lawsuits Boeing confronted following the disclosure of problems with the 737 Max was a class action brought by participants in the Boeing Voluntary Investment Plan who invested in the Boeing ESOP. The...more
On October 30, 2020, the U.S. Department of Labor (the “DOL”) issued a final rule on factors for selecting plan investments, which restricts “do-good” or “ESG” investing. In response to public comments, the final rule rolls...more
Four ERISA plan participants, who participated in four different ERISA plans, commenced an ERISA class action against four of the nation’s largest pharmacy benefit managers (PBMs), alleging that the PBMs breached their...more
Among the many claims brought by plaintiffs challenging investment offerings in defined contribution plans is the claim that plans should offer stable value funds in lieu of more conservative capital preservation funds, such...more
8/18/2020
/ 401k ,
American Airlines ,
Benefit Plan Sponsors ,
Breach of Duty ,
Defined Contribution Plans ,
Duty of Loyalty ,
Duty of Prudence ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Motion for Summary Judgment ,
Popular ,
Prohibited Transactions ,
Retirement Plan ,
Standing
The Fifth Circuit concluded that an individual plaintiff was not entitled to attorneys’ fees, even though she persuaded the Fifth Circuit to vacate and remand a summary judgment decision in favor of the Humana Health Plan,...more
A federal district court in Illinois recently dismissed “excessive fee” and “imprudent investment” claims against the plan fiduciaries of the CareerBuilder 401(k) plan fiduciaries, relying largely on the Seventh Circuit’s...more
7/10/2020
/ 401k ,
Benefit Plan Sponsors ,
Breach of Duty ,
Defined Contribution Plans ,
Duty of Loyalty ,
Duty of Prudence ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Excessive Fees ,
Fiduciary Duty ,
Retirement Plan ,
Self-Dealing