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 motions to dismiss claims by 401(k) plan participants because their copy-cat allegations of underperformance were insufficient to raise a plausible inference of imprudence. That is, until now. Last week, a federal district court judge in the Eastern District of Virginia became the first to conclude that the participants’ allegations of imprudence related to the BlackRock Funds were plausible. Trauernicht v. Genworth, No. 22-cv-532, 2023 WL 5961651 (E.D. Va. Sept. 13, 2023).
Tenth Circuit Adopts “Meaningful Benchmark” Pleading Standard in Dismissing Challenges to 401(k) Plan Fees
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 “meaningful benchmark” in order to survive a motion to dismiss. In addition to rejecting commonly pleaded “benchmarks” because they were not meaningful, the Court’s ruling is of particular significance because, unlike some other courts, it dismissed the participants’ “share-class claim”—ruling on a motion to dismiss that their allegation that cheaper share classes of the same mutual fund were available to the plan was demonstrably false. The case is Matney v. Barrick Gold, No. 22-4045, 2023 WL 5731996 (10th Cir. Sept. 6, 2023).
Pocket Guide to SECURE 2.0
SECURE 2.0 includes significant changes for retirement plan sponsors and employers, as discussed in our prior blog posts. If you are looking for a short summary organized by effective date, we have prepared a “pocket guide” chart, which can be downloaded here.
SECURE 2.0 Act of 2022 Arrives: (Another) Landmark Retirement Package
The wait is over for SECURE 2.0, a long-awaited (and debated) package of retirement plan reforms. Today, Congress passed the “SECURE 2.0 Act of 2022” as part of the 2023 Consolidated Appropriations Act; President Biden is expected to sign the bill into law soon. The bill text may be viewed here, and the Senate
Cryptocurrency in 401(k) Plans? Might be More Like “Crypto-nite,” Says the DOL in Its Latest Release
Kryptonite is a fictional substance that causes the mighty Superman to lose all his strength. According to a recent release from the U.S. Department of Labor Employee Benefits Security Administration (“DOL”), cryptocurrency might carry similar dangers for otherwise strong and healthy 401(k) plan accounts. That is, in DOL’s view, the benefits of cryptocurrency in 401(k)
District Court Rejects Demand for Jury Trial in 401(k) Investment Litigation
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 that ERISA claims are equitable in nature even when plaintiffs seek monetary relief, jury trials are unavailable. The case is Williams
Ninth Circuit Enforces Forum Selection Clause in 401(k) Plan
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 district court decision transferring an ERISA action from the Northern District of California to the District of
[Podcast]: Cyber-theft of 401(k) Accounts
In this episode of the Proskauer Benefits Brief, partner Robert Projansky and special guest Garrett Fenton, senior attorney at Microsoft Corporation, discuss cyber theft of 401(k) plan accounts. Tune in as we discuss why 401(k) plans are vulnerable to cyber security breaches, what kinds of cyber security frauds we are seeing in 401(k) plans, evolving litigation on these issues and steps plan sponsors can take to mitigate risk.
Department of Labor Proposal Would Curtail ESG Investing
On June 23, 2020, the U.S. Department of Labor (the “DOL”) issued a proposed rule (which was published in the Federal Register on June 30, 2020) that would amend its “investment duties” regulation set forth at 29 C.F.R. § 2550.404a-1. The DOL states that the proposed rule is intended to “eliminate confusion” and limit when and
Fifth Circuit Upholds Dismissal of Diversification and Prudence Claims Targeting A Single Stock Fund in a 401(k) Plan
The Fifth Circuit in Schweitzer v. Inv. Comm. of Phillips 66 Sav. Plan dismissed claims against 401(k) plan fiduciaries related to allowing plan participants to hold a single stock that was not an employer security as a plan investment alternative. No. 18-cv-20379, 2020 WL 2611542 (5th Cir. May 22, 2020). The Court held that: (i)