A federal district court in Massachusetts dismissed ERISA fiduciary breach and prohibited transaction claims against 401(k) plan fiduciaries, ruling that the prohibited transaction claims were time-barred and the fiduciary breach claims—once limited by a settlement agreement in an earlier class action against MassMutual involving similar allegations (“Gordan”)—failed to plausibly state a claim. The
investment claims
District Court Breaks Trend and Allows Claims Challenging Prudence of BlackRock LifePath Index Target Date Funds to Proceed
By Russell Hirschhorn & Daniel Wesson on
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
By Myron Rumeld, Russell Hirschhorn & Daniel Wesson on
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).
No Standing To Pursue Fiduciary-Breach Claim Where Plan Became Overfunded During Litigation
By Steven A. Sutro on
The Eighth Circuit held that defined benefit pension plan participants who alleged breach of fiduciary duty and prohibited transaction claims under ERISA lacked standing to assert their claims because, during the course of the litigation, the plan became overfunded. Plaintiffs brought suit after the plan lost $1.1 billion, which plaintiffs claimed arose from imprudent investments…