In a striking reversal of approach beginning in the summer of 2022, the District Court for the Eastern District of Wisconsin went from denying, in whole or in part, virtually every motion to dismiss ERISA lawsuits targeting plan recordkeeping fees and investment fund selections to granting all of them. This nearly 180 degree pivot comes … Continue Reading
A district court in New York recently dismissed a putative class action challenging retirement plan recordkeeping and investment management fees. The case is Singh v. Deloitte LLP, No. 21-cv-8458, 2023 WL 186679 (S.D.N.Y. Jan. 13, 2023). The court’s decision adds to the growing number of Second Circuit district courts relying on out-of-circuit appellate decisions to … Continue Reading
In Krutchen v. Ricoh USA, No. 22-cv-678, 2022 U.S. Dist. LEXIS 206792 (E.D. Pa. Nov. 15, 2022), a Pennsylvania district court dismissed an ERISA excessive fee complaint for failing to provide enough information about alleged comparator plans that allegedly paid less for recordkeeping services. The decision is notable for delivering defendants a victory in the … Continue Reading
In a pair of report and recommendations issued the same day, a Magistrate Judge in Wisconsin recently recommended that the district court (i) grant motions for reconsideration of prior denials of motions to dismiss claims challenging defined contribution plans’ fees, and (ii) grant the motions to dismiss in their entirety. Underpinning the recommendations is the … Continue Reading
In Matousek v. MidAmerican Energy Co., 2022 WL 6880771, __ F.4th __ (8th Cir. 2022), the Eighth Circuit joined the Sixth and Seventh Circuits in affirming dismissal of ERISA breach of fiduciary duty claims alleging that the plan fiduciaries allowed the plan to pay excessive recordkeeping and administrative fees and offered imprudent investment options. Background … Continue Reading
Two recent district court decisions add to the growing number of courts granting motions to dismiss putative ERISA class actions challenging defined contribution plan fees and investment performance. These decisions from the Eastern District of New York and the Eastern District of Wisconsin are the latest victories for defendants at the motion to dismiss stage … Continue Reading
In Baumeister v. Exelon, No. 21-cv-6505, 2022 U.S. Dist. LEXIS 176711 (N.D. Ill. Sep. 22, 2022) and Coyer v. Univar Sols. USA Inc., No. 22-cv-362, 2022 U.S. Dist. LEXIS 175972 (N.D. Ill. Sep. 28, 2022), two Illinois district courts became the first courts in the Seventh Circuit to rule on motions to dismiss ERISA fee … Continue Reading
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 administrative fees and investment underperformance. In this particular case, Oshkosh emerged victorious with the Seventh Circuit affirming the dismissal—at the … Continue Reading
The Sixth Circuit recently issued a mixed opinion in a 401(k) plan investment litigation. The Court upheld the dismissal of the plaintiffs’ fiduciary-breach claims relating to the investment management fees and performance of several of the plan’s investment options, but reinstated a claim for breach of fiduciary duty based solely on the plan fiduciaries’ alleged … Continue Reading
You do not need a Lexis or Westlaw subscription to know that major cases and significant judgments have sometimes hinged on the meaning of a single word, or the placement of a single Oxford comma. We have a recent case to add to the list: Weinberg v. Waystar, Inc., et al., which was an executive … Continue Reading
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 soon to declare a reversal of that trend, three recent decisions dismissing these types of claims present some hope … Continue Reading
The Sixth Circuit, in a matter of first impression for that Circuit, held an arbitration clause contained in an individual employment agreement did not apply to ERISA fiduciary breach claims brought on behalf of a defined contribution plan. The case is Hawkins et al. v. Cintas Corp., No. 21-2156, __ F.4th __, 2022 WL 1236954 … Continue Reading
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 classes. As with its decision reviving the other 401(k) plan litigation (discussed in detail here), the Ninth Circuit declined … Continue Reading
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 (2022). In Davis v. Salesforce.com, Inc., No. 21-15867 (9th Cir. Apr. 8, 2022), the Ninth Circuit, without discussing Hughes, … Continue Reading
In this episode of The Proskauer Benefits Brief, Myron D. Rumeld, partner and co-chair of Proskauer’s ERISA Litigation group and senior associate Tulio D. Chirinos, review the current state of affairs with respect to the litigation challenging the fees charged and investments offered in defined contribution plans; and The Supreme Court’s recent decision in Hughes v. Northwestern … Continue Reading
A federal district court in Florida sent a proposed ERISA breach of fiduciary duty class action to individual arbitration on the basis of a plan arbitration clause that allowed for individual relief and plan-wide injunctive relief. The case is Holmes v. Baptist Health South Florida, Inc., No. 21-cv-22986, 2022 WL 180638 (S.D. Fla. Jan. 20, … Continue Reading
To the disappointment of many in the ERISA community, the Supreme Court issued a six-page opinion on January 24th that declined to opine on most of the issues that were before the Court in Hughes v. Northwestern University, No. 19-1401 (U.S. Jan. 24, 2022). In a unanimous opinion authored by Justice Sotomayor, in which Justice … Continue Reading
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 back some of the restrictions and burdens from its proposed rule issued in June (summarized here), but it reaffirms … Continue Reading
The IRS recently released final regulations making a number of changes to the rules applicable to hardship distributions from 401(k) and 403(b) plans. Concluding our three-part series on the final regulations, this blog entry will focus on the following changes to the hardship distribution rules: (1) modifications to the list of safe harbor expenses that … Continue Reading
As discussed in our prior blog entry, the IRS recently released final regulations making a number of significant changes to the rules applicable to hardship distributions from 401(k) and 403(b) plans. As part of our continuing series on these final regulations, this blog entry will focus on two specific issues: (1) the elimination of the … Continue Reading
Last week, the Department of Treasury and the IRS issued final regulations regarding hardship distributions from 401(k) and 403(b) plans. The final regulations respond to comments based on earlier proposed regulations and make a number of significant changes to the existing IRS rules that apply to hardship distributions. Given the detailed material in the regulatory … Continue Reading
Over the past several years, the ERISA plaintiffs’ bar has targeted university-sponsored 403(b) plans, arguing that the plan fiduciaries breached their fiduciary duties and engaged in prohibited transactions in connection with offering certain investment options and the administrative fees associated with such plans. Among other things, they have argued that the plan fiduciaries offered too … Continue Reading
In this episode of the Proskauer Benefits Brief, Paul Hamburger co-chair of Proskauer’s Employee Benefits & Executive Compensation Group, and associate Steven Einhorn discuss the recently proposed IRS regulations addressing the hardship withdrawal rules affecting 401(k) and 403(b) plans. We will discuss challenging questions employers and administrators face as they work through the new requirements, which … Continue Reading
By Steven Einhorn and Caroline Cima on Posted in 403(b) Plans
The IRS recently issued Notice 2018-95 to provide transition relief to 403(b) plans that erroneously excluded part-time employees from eligibility to make elective deferrals when the employees should have been eligible to participate under the “once-in-always-in” requirement (“OIAI”). Under the OIAI requirement, once an employee is eligible to make elective deferrals, the employee may not … Continue Reading
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