A Deep Dive into the Dish Network Excess Fee Decision
By Daniel Aronowitz Key Points (1) The Court does not allow the defense to prove with participant account statements at the motion to dismiss stage that active plan participants paid nothing in recordkeeping fees, but finds the comparisons to eleven other random plans “inapt.” (2) The court follows the Sixth Circuit in CommonSpirit to […]
The Fluor Court Sets a High Bar for Investment Imprudence Claims
By Daniel Aronowitz Key Points (1) A complete and diligent fiduciary process can result in underperformance – fiduciary prudence is judged, even at the motion to dismiss stage, based on process and not results. (2) This is the second court to dismiss (without prejudice) the dubious Miller Shah investment imprudence claims that BlackRock LifePath […]
The Key Fiduciary Liability Storylines of 2022
By Daniel Aronowitz The risk environment for fiduciaries of America’s employee benefit plans continues to heighten, as creative and enterprising plaintiff lawyers discover new ways to engineer fiduciary risk for plan fiduciaries in America’s judicial system. This past year, politicians and regulators have added further uncertainty and risk for plan fiduciaries. The following is a […]
The Colgate Participant Account Cyber Theft Case Survives Dismissal Despite “Very Thin” Claims
By Daniel Aronowitz A New York federal district court ruled on December 19, 2022 that a participant in the Colgate-Palmolive defined contribution plan adequately alleged breach of fiduciary duty claims against the plan recordkeeper and the plan fiduciary committee (but not the bank custodian). It is a curious decision that is worth studying to understand […]
Divane v. Northwestern: Is Good Faith Enough for Plan Fiduciaries?
By Daniel Aronowitz The Seventh Circuit Court of Appeals heard oral argument in the remanded Divane v. Northwestern excessive fee case on the morning of November 29. The Seventh Circuit panel was skeptical of the excessive fee claims, and especially concerned that the lawsuit was “Monday-morning quarterbacking” of plan fiduciaries who had revamped the plan […]
Analyzing the Hughes v. Northwestern Excessive Fee Case Before the Seventh Circuit’s November 29 Oral Argument
By Daniel Aronowitz Like a bad movie sequel, the Northwestern excessive fee case is back for another round. The Seventh Circuit Court of Appeals will hear oral arguments on the remanded case from the Supreme Court on the morning of Tuesday, November 29. It is the long-awaited opportunity to learn how the Seventh Circuit will […]
ICI Defends Revenue Sharing and Higher-Fee Share Classes in the Tenth Circuit Barrick Gold Case
By Daniel Aronowitz The key significance of the Barrick Gold excessive fee case is that the district court used evidence outside the misleading complaint to dismiss the case – namely the 15 bps revenue sharing credit back to participants. The revenue-share credit demonstrated that the recordkeeping and investment fees in the complaint were inflated and […]
A Deep Dive into the Hy-Vee Excessive Fee Case
By Daniel Aronowitz Iowa Court in the Hy-Vee Case Calls Out Credibility of Defense “Playbook” of Filing Indiscriminate Motions to Dismiss in Every Excessive Fee Case Plan sponsors have had good recent success in excessive fee and performance lawsuits, with three federal circuit courts of appeal upholding motions to dismiss. But before we start reaching […]
Common Myths of Cyber Insurance for Employee Benefit Plans
Cyber insurance is a critical component of the cyber security risk management program necessary to protect employee benefit plans and participant retirement assets, but it is largely misunderstood. To wit, PLANSPONSOR has detailed an October 5 panel hosted by the National Institute of Retirement Security on how plan sponsors can combat cybercrime. How Plan Sponsors […]
Colgate Recordkeeper’s Liability in Account Theft Search
By now, most of us have heard that a plan participant in the Colgate-Palmolive 401k plan suffered a cyber theft of her entire account balance, and sued the plan fiduciaries, the recordkeeper, and the bank custodian. Cyber theft of retirement plan assets is a common occurrence, but most cases are resolved when the recordkeeper restores […]
