Two District Courts have reached conflicting decisions on the same day when ruling on substantially similar allegations that plan fiduciaries violated ERISA by paying too much for recordkeeping services, with one court dismissing the claims and the other court allowing the claims to move forward into the (often expensive) discovery phase of litigation. The cases
Fiduciary Breach
Dismissal Streak Continues in BlackRock Target Date Fund Litigation
By Joseph Clark, Myron Rumeld & Daniel Wesson on
A third district court has dismissed with prejudice a complaint alleging that defendants breached their fiduciary duties under ERISA by offering 401(k) plan participants the option to invest in BlackRock LifePath Index Target Date Funds (the “Funds”). Beldock v. Microsoft, Case No. 22-cv-1082 (W.D. Wash. Apr. 24, 2023). Although the outcome of the court’s ruling here is consistent with earlier decisions, the rationale underlying the Beldock decision arguably goes further than in prior rulings, thus providing additional food for thought.
Northwestern University’s Alternative Explanations Not Strong Enough To Defeat ERISA Excessive Fee Claims
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 allegations of excessive recordkeeping and investment management fees, but dismissed their claim that too many investment options caused them “decision paralysis.” In…
District Courts Reach Opposite Conclusions on 401(k) Excessive Fee Claims
By Myron Rumeld, Tulio Chirinos & Daniel Wesson on
A district court in the Southern District of Ohio and one in the Western District of Wisconsin reached opposite conclusions on motions to dismiss claims for fiduciary breach based on allegations that recordkeeping fees were unreasonably high. Dismissal was granted in Sigetich v. The Kroger Co., No. 21-cv-697, 2023 WL 2431667 (S.D. Oh. Mar.…