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COLLECTED WISDOM™ on Court and Legal Actions Related to Retirement Plans

A directory and index of articles that review what is happening in the courts and legal system.

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Actuary Company Reaches $4M Settlement in 401k Fee Class Action Suit

Insurance Services Offices Inc., an actuarial and underwriting company, has agreed to pay $4 million to settle a proposed class action lawsuit filed by ex-employees concerning its 401k Savings and Employee Stock Ownership Plan. The former workers alleged that ISO charged them excessive fees and failed to monitor the plan's investments in violation of ERISA.

Source: Hallbenefitslaw.com, February 2024

California District Court Denies Motion to Dismiss 401k Excessive Fee and Underperformance Claims

A California district court recently denied a motion to dismiss claims that the fiduciaries of a 401k plan breached their ERISA fiduciary duties of prudence and loyalty by selecting underperforming, high-cost investments and causing the plan to pay excessive fees for services. The decision is notable for illustrating how pleading standards in investment performance and excessive fee litigation vary depending on jurisdiction.

Source: Erisapracticecenter.com, February 2024

DOL Gets Temporary Restraining Order Against TPA

The DOL has gone to court to protect retirement plan assets in a case of alleged embezzlement by a TPA. According to the DOL, RiversEdge is a third-party administrator of at least 240 retirement plans that hold millions of dollars in plan assets and acts as an agent to manage and administer plan assets, at least 229 of these retirement plans are covered by ERISA.

Source: Napa-net.org, February 2024

Impact on ERISA Regulation if Supreme Court Throws Chevron Deference Overboard

Although Relentless and Loper Bright do not directly implicate ERISA, a repeal of Chevron deference would almost certainly affect how courts treat regulations under ERISA. Two current ERISA hot topics that come to mind are the proposed Retirement Security Rule and the Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights rule. If the Court abandons or curtails the Chevron deference, ERISA regulations adopted by the DOL may be more heavily scrutinized, modified, or vacated by federal courts.

Source: Morganlewis.com, February 2024

Honeywell Hit With Forfeiture-Related Fiduciary Breach Suit

Another suit has been filed against a large employer for allegedly not acting in participants' best interest in their use of forfeitures, but with some twists in the arguments. The target this time is the fiduciaries of the Honeywell 401k plan who, according to the participant-plaintiff, have (1) breached their fiduciary duties under ERISA, (2) violated ERISA's anti-inurement provision, and (3) engaged in "self-dealing and transactions prohibited by ERISA."

Source: Napa-net.org, February 2024

Milliman Headed to Trial Over Its 401k

Late last week, the company's request to quash the case through summary judgment was shot down by the judge presiding over it, who scheduled a rare bench trial to begin April 1. Whether the case goes to trial is a question. Clearing motions to dismiss and defense motions for summary judgment are considered significant victories for plaintiffs, and getting over those hurdles adds pressure to settle.

Source: Investmentnews.com, February 2024

Wisconsin Federal District Court Issues Five Rulings on Motions to Dismiss 401k Investment and Fee Cases: Is There a Way to Reconcile Them?

Defense counsel frequently laments the difficulties of defending 401k investment and recordkeeping fee litigation when different judges render conflicting rulings on motions to dismiss seemingly indistinguishable complaints. For that reason, the author of the article thought it would be interesting to track the decisions by a single judge in the Eastern District of Wisconsin who rendered five rulings in this arena within one week. The hope was that the rulings would provide some insight as to distinguishing features that, at least for this judge, would drive the outcome of each motion to dismiss.

Source: Erisapracticecenter.com, February 2024

Five Important ERISA Decisions Rounded Out 2023

Federal appellate courts issued various decisions involving ERISA in the latter half of 2023. Here are five important ERISA decisions that benefit attorneys should know.

Source: Hallbenefitslaw.com, February 2024

CoreLogic Clears 401k Excessive Fee Claims

Another 401k excessive fee suit has been dismissed because the participant bringing suit suffered no injury, and thus, had no grounds to bring suit according to a federal court. The suit charged that CoreLogic, Inc. together with its plan administrator, breached its duties under ERISA to employees invested in its 401k retirement plan.

Source: Napa-net.org, February 2024

Forfeiture Litigation Raises New Issues for Plan Fiduciaries

Groom Law Group's George M. Sepsakos covers allegations and potential implications of recent lawsuits against plan fiduciaries related to the use of plan forfeitures.

Source: 401kspecialistmag.com, January 2024

401k Excessive Fee Suit Finally Dismissed

Noting that "at some point, there must be some endpoint to this time-consuming and expensive cycle of litigation," a federal judge has dismissed a 401k excessive fee suit. That "expensive cycle" dates back to October 2020 when a suit (Guyes et al. v. Nestle USA Inc. et al.) was brought in the U.S. District Court for the Eastern District of Wisconsin.

Source: Napa-net.org, January 2024

ERISA Litigation Faces New Frontiers in 2024

In 2023, just over 100 new class actions were filed under ERISA. This is the lowest number filed since 2018, largely driven by fewer new cases alleging excessive fees in retirement plans. This article explores what 2024 could bring for ERISA litigation regarding excessive fee cases, prohibited transaction cases, health plan fee cases, and more.

Source: Groom.com, January 2024

401k Fiduciary Warning: This Is How the Supreme Court's Chevron Decision Might Impact the Retirement Plan Industry

The nation's highest court heard arguments involving the National Marine Fisheries Service. It seems they don't appreciate the government requiring fishing companies to pay certain regulatory costs. This concept is allowed under a 1984 Supreme Court decision involving Chevron. Overturning Chevron will not only impact the fishing business but all regulated activities, including the retirement plan industry. There are some immediate ramifications for plan sponsors and they will need to pay close attention to events as they unfold.

Source: Fiduciarynews.com, January 2024

Could Have, or Would Have, That Is the ERISA Question

An extremely rare jury verdict in an ERISA fiduciary breach case has led to a Shakesperean-like quandary. "Could Have, or Would Have, That is the Question." According to the class, the jury did not receive adequate guidance on how to assess loss and damages. The class claimed that the district court incorrectly instructed the jury that Yale and its fiduciary committee could avoid financial liability merely by showing that a prudent fiduciary "could have" made the same decisions, rather than requiring defendants to prove that a prudent fiduciary "would have" made the same decisions.

Source: Cohenbuckmann.com, January 2024

DOL Sues Defunct Maryland Biz for Unremitted 401k Contributions

The DOL announced this week that it has filed a lawsuit against now-defunct Elkridge, Md.-based computer forensic company Jones Dykstra and Associates Inc. and its co-owners for failing to remit nearly $44,000 in participant and employer contributions to the company's 401k profit-sharing plan for five years.

Source: 401kspecialistmag.com, January 2024

Intuit Files to Dismiss Forfeiture Fiduciary Breach Suit

"If this is the law, then that would be news to Congress and the regulatory agencies, which have declared for decades that forfeitures can be used in this manner," says a motion to dismiss a lawsuit alleging a fiduciary breach in offsetting employer contributions with forfeitures.

Source: Napa-net.org, January 2024

Summary of 2023 401k Excess Fee and Performance Litigation

In all, 2023 was a year of significant activity in pending cases, with a record forty-two settlements, a record number of motions to dismiss, summary judgment, and appellate rulings, and at least five cases being tried, including one before a jury. With new plaintiff firms entering the fray, all signs point to a continued high volume of excess fee cases and heightened risk exposure for sponsors of America's large retirement plans, especially jumbo-sized plans. Here is a summary of the 2023 case filings, trends, and reported settlements in ERISA excess fee and performance litigation.

Source: Euclidspecialty.com, January 2024

DOL Successfully Sues Employer for Misuse of Forfeitures

Several lawsuits have recently been filed regarding the alleged misuse of forfeitures, but just a couple of months ago a plan was sued and lost a case brought by the DOL for not following the plan document's forfeiture provisions. Details of the case here.

Source: Napa-net.org, January 2024

Parties Strike Settlement in Excessive Fee Suit

A billion-dollar plan has come to terms with participant plaintiffs represented by Capozzi Adler who had made claims the plan paid $77 per participant when plans of similar sizes were paying as little as $25 per participant. The suit had been filed against Advance Stores Company, the plan sponsor and a named fiduciary, as well as the Retirement Committee of Advance Auto Parts 401k Plan.

Source: Napa-net.org, December 2023

A Closer Look at Arbitration Provisions in ERISA Breach of Fiduciary Duty Claims

As plan sponsors increasingly look to arbitration provisions to avoid costly class action litigation, courts across the nation have weighed in on whether plan-wide claims for breach of fiduciary duty under ERISA Section 502(a)(2) can be subject to mandatory arbitration. Here is a review of court rulings on the issue.

Source: Truckerhuss.com, December 2023

Suit Says Retirement Account Sweep Rates Unreasonable

A new suit claims that the interest rates paid on Merrill Edge retirement accounts have lagged market trends and fallen short of the "reasonable" rates they claim to provide. The suit was brought by one Margaret McCrary, who has filed a class action suit for breach of contract on behalf of herself and a Class of persons or entities who maintained Merrill Edge retirement accounts at any time beginning March 17, 2022.

Source: Napa-net.org, December 2023

Defendants Move to Dismiss Forfeiture Fiduciary Breach Suit

Fiduciary defendants of the Clorox Company 401k plan have moved to dismiss (with prejudice) a 401k suit that alleged a fiduciary breach in the use of forfeitures to offset company contributions saying, among other things, that the participant-plaintiff suffered no injury, and thus, had no standing to sue.

Source: Napa-net.org, December 2023

BlackRock Sued for Alleged Misleading ESG Strategy

State Attorney General Jonathan Skrmetti said BlackRock funds that don't take into account ESG factors are being unfairly impacted by the asset manager's membership in climate groups, its shareholder-voting record, and the pressure it puts on companies to meet environmental goals, according to a complaint filed Monday in state court. This shows a "pattern of deception" that has hurt investors, the complaint says. BlackRock said in a statement that it rejects Tennessee's claims and plans to contest the accusations.

Source: Investmentnews.com, December 2023

Longstanding Internal Revenue Service Position Called Into Question

The Internal Revenue Service's longstanding position has been that forfeitures in a tax-qualified defined contribution plan can be used in only three ways: payment of reasonable plan expenses; reduction of employer contributions; or allocation to plan participants. Recently, several class action lawsuits have been filed challenging the permissibility of plan language providing discretion as to how forfeitures should be used.

Source: Wagnerlawgroup.com, December 2023

Litigation Trends to Watch in 2024: Drop in TDF Suits, More Forfeiture Complaints

There is good and bad news when it comes to the litigation targeting defined contribution plan fiduciaries in 2024, according to attorneys from Faegre Drinker Biddle & Reath LLP. In one area of class action complaint, attempts to sue plan fiduciaries for choosing one type of low-cost target-date fund versus other options appear to be petering out, in part due to a string of losses. However, an area of increased litigation, and focus, is emerging in a series of complaints targeting how retirement plan forfeitures are being used by plan sponsors.

Source: Planadviser.com, December 2023

Lack of "Meaningful Benchmark" Bounces Another 401k Excessive Fee Suit

Fiduciaries of a relatively small 401k plan have fended off an excessive fee suit with a federal judge finding no "meaningful benchmark" against which to assess a fiduciary violation.

Source: Napa-net.org, December 2023

2023 Retirement Plan Litigation Highlights

According to a recent report, from 2019 to mid-2022, over 200 class action lawsuits were filed against 401k plans, fiduciaries, and plan sponsors. Companies spent over $150 million to settle those lawsuits. To provide plan fiduciaries with an update regarding some of the most recent litigation in the industry, this article reviews some of these lawsuits including some lessons for plan sponsors.

Source: Conradsiegel.com, December 2023

401k Excessive Fee Suit Parties Strike Settlement

After years of hard-fought litigation, the parties in an excessive fee suit have come to terms, including cash and "other non-monetary relief." Participant-plaintiffs -- on behalf of the ISO 401k Savings and Employee Stock Ownership Plan -- have submitted an Unopposed Motion for Preliminary Approval of Class Action Settlement for the court's approval.

Source: Napa-net.org, December 2023

Massachusetts Federal Court Initially Approves $61M Retirement Funds Settlement in GE Retirement Fund Case

A Massachusetts federal court has given preliminary approval to a $61 million settlement in a pending lawsuit concerning General Electric's alleged mismanagement of retirement savings invested in a proprietary fund. The settlement would partially reimburse about 200,000 current and former participants in GE's 401k plan for losses incurred since September 2011 because of GE Asset Management's comparatively poor performance.

Source: Hallbenefitslaw.com, December 2023

Tyson Foods Employees Allege Excessive 401k Plan Fees

Tyson Foods' retirement plan committee is the defendant in a class action complaint filed by three employees accusing the Arkansas-based meat production company of passing on to participants excessive fees for 401k recordkeeping done by Northwest Plan Services.

Source: Planadviser.com, December 2023

Second Circuit Establishes Practical Pleading Requirement for Prohibited Transaction Claims

The Second Circuit recently held that to state a claim for a prohibited transaction under ERISA section 406(a)(1)(C), it is not enough to allege that a fiduciary caused the plan to compensate a service provider for its services. Instead, "the complaint must plausibly allege that the services were unnecessary or involved unreasonable compensation."

Source: Erisapracticecenter.com, December 2023

Federal Court Upholds DOL's Final ESG Rule for Plan Fiduciaries

A Texas federal judge recently upheld a DOL final rule concerning environmental, social, and governance considerations in investment decisions by plan fiduciaries. Nonetheless, plan sponsors should understand that considering ESG factors remains permissible rather than compulsory and always should be secondary to the plan's financial interests.

Source: Hallbenefitslaw.com, December 2023

Tyson Foods Latest Target of Excessive 401k Fee Lawsuit

The latest big 401k excessive fee lawsuit was filed this week against Tyson Foods Inc. in the U.S. District Court for the Western District of Arkansas, where three employees brought a proposed class action accusing the Arkansas-based meat-processing giant of mismanaging its $3.2 billion 401k plan by overpaying for recordkeeping.

Source: 401kspecialistmag.com, December 2023

Bed Bath & Beyond, Bankruptcy, and Fiduciary Litigation

In September 2023, former employees of Bed Bath & Beyond sued members of the company's 401k committee, the committee responsible for the prudent management of the company's 401k plan. The former employees allege they lost more than $5 million following the company's bankruptcy filing in April 2023, a loss the committee could have avoided. Here is a cautionary tale of Bed Bath & Beyond's bankruptcy.

Source: Woodruffsawyer.com, November 2023

Federal Court Tosses 401k Plan Mismanagement Suit Against Old Dominion

A federal court judge in North Carolina dismissed a lawsuit in which a former employee alleged that Old Dominion Freight Line had violated its fiduciary duty under ERISA by mismanaging its workers' 401k plan. Specifically, ex-employee Harvey Davis claimed that Old Dominion failed to substitute cheaper investment funds for more expensive options, thus violating the duty of prudence under ERISA and failing to monitor the plan adequately.

Source: Hallbenefitslaw.com, November 2023

A Victory for Plan Fiduciaries: The Second Circuit Clarifies the Pleading Standard for Prohibited Transaction Claims

For years, courts have struggled with the appropriate standard to apply to ERISA-prohibited transaction claims at the pleading stage. In Cunningham v. Cornell University, a case that involved a 403b defined contribution plan, the Second Circuit addressed the pleading standard necessary to sufficiently allege a party-in-interest prohibited transaction claim. The Second Circuit issued a well-reasoned opinion that may have significant implications for ERISA-prohibited transaction claims at the pleading stage.

Source: Groom.com, November 2023

DOL Sues Shuttered Law Firm Over Participant's Assets

The Department of Labor sued the retirement plan of defunct law firm McCullough, Campbell & Lane LLP, and four of the firm's capital partners on November 20 for allegedly failing to terminate the company retirement plan, which holds $5.4 million in assets.

Source: Plansponsor.com, November 2023

$4.5 Million Settlement Struck in 401k Excessive Fee Suit

The parties in a suit that claimed a $7.3 billion MetLife 401k Plan "stocked the Plan's investment menu with their own proprietary index funds," while "participants got the short end of the stick" have come to terms with a significant recovery for the settlement class compared to the claims that were alleged.

Source: Napa-net.org, November 2023

Latest in 401k Litigation: Cap Group Sued, Metlife to Pay $4.5M Settlement

Capital Group, the provider of American Funds, was sued this month over its own $5 billion 401k plan. In that case, the plaintiffs in the proposed class action allege that the company breached its duties to the plan by "mismanaging and failing to remove imprudent investments" and not monitoring the fiduciaries it appointed. In the MetLife case, it will pay $4.5 million to settle a lawsuit over the company's 401k plan. That amount will resolve a 2021 case alleging that the insurance company violated its fiduciary duty to plan participants by including in-house products on the 401k menu rather than ostensibly superior funds from competitors.

Source: Investmentnews.com, November 2023

401k Suit Says Court Should Exclude Expert "Opinion"

A recent appellate court ruling that upheld a district court's rejection of expert witness testimony has been raised as a defense in an excessive fee suit. The suit in question involved the fiduciaries of the $5.2 billion L3Harris Retirement Savings Plan.

Source: Napa-net.org, November 2023

Hidden Advisor Fees: Ninth Circuit and DOL Let the Sunshine In

The sponsor fiduciary's obligation to review and monitor indirect compensation would also apply to fiduciary advisors. In addition to monitoring the reasonableness of the adviser's indirect compensation, there are several other conditions in the proposal related to the impartial conduct standards that may also require review and monitoring that are discussed in the article.

Source: Cohenbuckmann.com, November 2023

Cornell Captures Another Win in Long-Standing Excessive Fee Suit

Another university 403b plan has won yet another victory in staving off an excessive fee suit by the Schlichter law firm. The case involved Cornell University, which had already successfully fended off most of the claims in 2019. In this most recent ruling in the U.S. District Court for the Southern District of New York, Judge P. Kevin Castel ruled that the plaintiffs had plausibly argued that it was imprudent to pay annual recordkeeping fees of more than $115 per participant but presented no evidence that this caused the plan to suffer losses.

Source: Napa-net.org, November 2023

D.C. Federal Court Judge Dismisses 401k Provider's Challenge to DOL Cryptocurrency Guidance

A D.C. federal court judge dismissed a 401k provider's lawsuit challenging the DOL guidance concerning cryptocurrency investments. In his ruling, the judge found that DOL guidance was not subject to judicial review, and the 401k provider lacked standing to file suit.

Source: Hallbenefitslaw.com, November 2023

Forfeitures Accounts -- The Next New Topic of ERISA Litigation Trends & Should You Be Concerned?

A handful of new ERISA litigation cases are aiming at forfeiture accounts and trying to pull them into the never-ending list of ways in which retirement plan fiduciaries have purported to breach their fiduciary duty to plan participants. The recent lawsuits argue that even though permitted by the plan document, it was a breach of fiduciary duty to exercise discretion to use the plan's forfeitures to reduce company contributions, rather than to offset expenses of the 401k plan.

Source: Graydon.law, November 2023

United Airlines Sues Advisers for Scheme to Defraud 401k Pilot Participants

United Airlines Inc. and its retirement plan committee have filed a complaint against an independent advisor for an alleged scheme to defraud retirement plan participants through a personalized retirement account, according to court filings. United alleges that Keep Safe Investments LLC, J&K Connect LLC, and adviser Krisi Berge had, "unbeknownst to plaintiffs, and contrary to the terms of the plan," taken loans from the retirement accounts of participants in the United Airlines Pilot Retirement Account Plan for "personal gain."

Source: Planadviser.com, November 2023

AT&T Rebuffed in Controversial 401k Prohibited Transaction Ruling

The telecommunications giant's motion to have a controversial appellate court decision reconsidered by the full court has been rejected. The denial of a rehearing leaves the case where it was; with a directive for the lower court to reconsider the issue(s) already presented, but with the "new" interpretation of the issue provided by the appellate court. Or -- and as seems likely considering the sweeping impact of this decision, and its argued divergence from similar cases in other districts -- to appeal to a higher court.

Source: Napa-net.org, November 2023

Plaintiff Drops Blackrock TDF Suit

As several similar suits have failed to gain traction in federal court, the participant-plaintiff in one of those suits has dropped his suit. The notice of voluntary dismissal was filed in the U.S. District Court for the Southern District of New York by Jermaine Anderson, a former worker at Advance Publications Inc., and a participant in the firm's $1.5 billion 401k plan.

Source: Napa-net.org, November 2023

Schlichter Sanction Swept Aside by Appellate Court

A federal appellate court has determined that a lower court "abused its discretion" in assessing a $1.5 million sanction against the Schlichter Bogard law firm.

Source: Napa-net.org, November 2023

Whole Foods 401k Targeted with Excessive Fee Suit

Another multi-billion-dollar 401k plan finds itself in the crosshairs of an excessive fee suit. This time it was participant-plaintiffs bringing suit against the Whole Foods Market Growing Your Future 401k Plan. The claims put forth are nearly identical to those filed in any number of these excessive fee suits.

Source: Napa-net.org, November 2023

Has ERISA Class Action Litigation Made a Positive Difference for Plan Participants?

The author writes, "A recent article this month in Pension & Investments asked ERISA lawyers whether class action litigation has made a positive difference for plan participants. The premise of the article was that while many critics issue harsh assessments about class action litigation, plan participants have nevertheless seen positive changes and fee reductions from the litigation.... Plan administration and investment fees are universally lower for nearly every plan, and large plans have adopted best fiduciary practices that include advice and monitoring of investments by sophisticated investment advisors. [But] the current slate of cases have an entirely different agenda."

Source: Euclidspecialty.com, November 2023

How Retirement Security Litigation Has Impacted the DC Landscape

"The role of litigation depends on where you stand," said Bradford Campbell, a partner in the law firm of Faegre Drinker Biddle & Reath. "I don't think lawsuits have made improvements." Instead, ERISA lawsuits have perpetuated a series of "fiduciary myths," said Campbell. He said those myths include assertions that passive investments reduce litigation risk vs. active investments, that lower fees reduce litigation risk, and that short-term performance is a reason for removing an investment from a plan lineup.

Source: Wagnerlawgroup.com, October 2023

New Wave of 401k Forfeiture Lawsuits May Hinge on Plan Terms

Qualcomm, Intuit, and Clorox are facing new lawsuits asking whether a common way of handling forfeited 401k money could violate federal law, a legal theory that could turn on the language used by a given plan.

Source: Wagnerlawgroup.com, October 2023

Two More Suits Say Forfeiture Reallocation Was a Fiduciary Breach

Two more suits in two different California federal district courts have just challenged the use of plan forfeitures to offset company contributions as not being in the best interests of plan participants.

Source: Napa-net.org, October 2023

Understanding Excessive Fee Litigation Risk in Retirement Plans

Plaintiff firms continue to be creative in bringing forth fiduciary claims against organizations and those who oversee their retirement programs. It's not enough to just have the right insurance coverage. Organizations need to institute the right internal governance processes to manage their fiduciary liabilities and risks.

Source: Newfront.com, October 2023

Two Plan Sponsors Accused of Improper Use of 401k Forfeitures

In two recent lawsuits, plan fiduciaries have been accused of violating ERISA by using plan forfeitures to offset future employer contributions, as well as to pay administrative expenses. Representatives from the law firm, which is not involved with either case, stated that the claims are surprising, given that this use of forfeitures is well established and widespread.

Source: Planadviser.com, October 2023

Settlement Announced in Big 401k Proprietary Fund Suit

The parties in a suit that claimed the fiduciaries of the $7.3 billion MetLife 401k Plan "stocked the Plan's investment menu with their own proprietary index funds" while "participants got the short end of the stick" have come to terms.

Source: Napa-net.org, October 2023

A Second Suit Stakes Out Forfeiture Use as Fiduciary Breach

For the second time in a month, a law firm has brought suit challenging the use of forfeitures in a 401k plan. The suit acknowledges that "although the Plan expressly authorizes the use of forfeited funds to pay Plan expenses, throughout the class period Defendants chose to utilize the forfeited funds in the Plan for the Company's own benefit, to the detriment of the Plan and its participants, by reallocating nearly all of these Plan assets to reduce future Company matching contributions to the Plan."

Source: Napa-net.org, October 2023

GE to Pay Record-Setting $61 Million to Resolve 401k Proprietary Funds ERISA Lawsuit

General Electric will pay $61 million in cash to resolve a 6-year-old ERISA lawsuit. The settlement is being called the largest ever in an ERISA case alleging a retirement plan improperly offered proprietary funds. The settlement must still be approved by United States District Court for the District of Massachusetts. A preliminary hearing has been scheduled for October 17, 2023.

Source: 401kspecialistmag.com, October 2023

Department of Labor's "ESG" Rule Survives Challenge in Federal District Court

Since its effective date in February 2023, the DOL's rule officially titled Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, colloquially called the "ESG rule," has been challenged in both the courts and US Congress. In September 2023, a federal district court in one of the two court challenges ruled in favor of the DOL and its authority to adopt the ESG rule. Here is a review.

Source: Morganlewis.com, October 2023

Michigan Court Dismisses ERISA Class Action

Class action lawsuits continue to target ERISA fiduciaries for their decisions about investment options and fees. The standard for dismissing cases at the pleading stage is still evolving, but recent decisions suggest that courts are evaluating allegations closely and requiring data on suitable comparators before permitting an ERISA class action to proceed to discovery.

Source: Littler.com, October 2023

Plaintiffs Target Use of 401k Plan Forfeitures

In the past month, plaintiffs have filed two separate lawsuits -- Dimou v. Thermo Fisher Scientific, Inc. and Rodriguez v. Intuit, Inc. -- accusing plan fiduciaries of violating ERISA, by using plan forfeitures to offset future employer contributions. This use of forfeitures is widespread, so sponsors and providers will want to monitor the cases closely. For plan sponsors and service providers, these new claims are disconcerting and offer another example where a long-common practice is now being challenged in the context of a class action complaint.

Source: Groom.com, October 2023

Judge Dismisses Another 401k Suit Involving BlackRock TDF Funds

Another in the series of suits alleging that plan fiduciaries "chased low fees" and ignored investment performance has been dismissed, though there was a unique twist here.

Source: Napa-net.org, October 2023

Forfeiture Offset Fuels Fiduciary Breach Suit

Plaintiff Konstantina Dimou, a participant in the Thermo Fisher Scientific Inc. 401k Retirement Plan, filed suit on behalf of the plan as a representative of a class of participants and beneficiaries of the Plan, against Defendants Thermo Fisher Scientific Inc. and the Management Pension Committee of the Thermo Fisher Scientific Inc. 401k Retirement Plan "for (1) breach of ERISA's fiduciary duties, (2) violation of ERISA's anti-inurement provision, and (3) engaging in self-dealing and transactions prohibited by ERISA."

Source: Napa-net.org, September 2023

Four Takeaways for Benefits Attys After Judge Clears ESG Rule

A Texas federal judge's decision finding the U.S. Department of Labor's socially conscious investing rule didn't violate federal law represents a significant legal victory for the DOL at a time the agency's broader rulemaking efforts are under fire, attorneys say.

Source: Wagnerlawgroup.com, September 2023

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