In Rose v. PSA Airlines, Inc., 80 F.4th 488 (4th Cir. 2023), the U.S. Court of Appeals for the Fourth Circuit held that ERISA § 502(a)(3), which permits a claim for “other appropriate equitable relief,” does not allow claims to recover money from a defendant’s general assets. This alert discusses the Rose decision and its potential impact on ESOP cases.
Continue reading “Thinking ESOPs: Fourth Circuit Narrows Equitable Relief Under ERISA”
In Waggeh v. Guardian Life Ins. Co. of Am., 2023 WL 4373897 (D. Mass. July 6, 2023), Chief Judge Saylor of the District of Massachusetts rejected the plaintiff’s contention that her state law claims “fell outside the provisions of ERISA,” and dismissed the complaint on the grounds that they were preempted by ERISA. In support of its motion to dismiss, Guardian offered an affidavit disputing the assertions in the complaint, but did not include a copy of the policy or the plan with the affidavit. While the court ultimately dismissed the complaint, Guardian’s affidavit was not considered — emphasizing the importance of governing documents.
Continue reading “Waggeh v. Guardian Highlights Importance of Governing Documents in ERISA Disputes”
Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, ERISA Moments: What Will be in the New DOL Fiduciary Proposal: Our Thoughts, below.
Continue reading “ERISA Moments: What Will be in the New DOL Fiduciary Proposal: Our Thoughts”
Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, The DOL’s New Fiduciary Proposal is at the OMB: What’s Next?, below.
Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the first episode, A Federal Court Decides on the DOL’s ESG Regulation, below.
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Written by members of Faegre Drinker’s benefits and executive compensation team, this blog features analysis and information on matters related to retirement plans, health and welfare plans, ESOPs, ERISA litigation, fiduciary governance, and other benefits issues.
This quarterly digest provides links to our most popular posts during the past few months so that you can catch up on what you missed or re-read them.
By Sarah Bassler Millar, Yael Kalman and Dawn Sellstrom
Plan sponsors, insurers, and third-party administrators should pay close attention to the new guidance to facilitate health plan compliance with complex nonquantitative treatment limitation comparative analyses requirements.
By Kimberly Jones and James E. Crossen
401(k) plan fiduciaries recently defeated a lawsuit alleging the fiduciaries imprudently managed and paid excessive record keeping an investment fees. The victory for the fiduciaries follows a jury trial win of Yale University’s 403(b) plan. The court opinions in both of these cases serve as a good reminder that offense is the best defense, and ERISA plan fiduciaries best protect themselves against ERISA breach of duty of prudence claims by proactively implementing strong fiduciary governance practices, such as keeping thorough committee meeting minutes.
By Mona Ghude and Mark Rosenfeld
On August 25, 2023, the IRS announced a two-year delay for the Roth catch-up contribution requirement for employees making $145,000 or more in the prior calendar year that would have applied in 2024. The Roth catch-up contribution requirement will now be effective for taxable years beginning after December 31, 2025.
Following a bench trial in a Pennsylvania federal district court in Nunez v. B. Braun Medical, Inc., 401(k) plan fiduciaries defeated a lawsuit alleging that the fiduciaries imprudently managed and paid excessive recordkeeping and investment management fees. The B. Braun Medical fiduciaries’ win follows on the heels of a jury trial win by fiduciaries of Yale University’s 403(b) plan. The court opinions in both of these cases serve as a good reminder that offense is the best defense, and ERISA plan fiduciaries best protect themselves against ERISA breach of duty of prudence claims by proactively implementing strong fiduciary governance practices, such as keeping thorough committee meeting minutes. Consistently creating and maintaining detailed records regarding the initial selection and ongoing monitoring of vendors and investment options will help the committee defend those decisions later.
In Nunez, the court found that both the processes and the outcomes with respect to the plan’s recordkeeping and investments were objectively prudent—the opposite of which the plaintiffs would be required to prove to win their case.
Continue reading “Another 401(k) Plan Fiduciary Defeats Breach of Fiduciary Duty Claims at Trial”
A series of cases against fiduciaries of 401(k) plans that offer BlackRock Target Date Funds (TDFs) have been dismissed by district courts in recent months. In three recent cases, the district courts held that plaintiffs failed to allege any facts about the plan fiduciaries’ process for selecting and monitoring the BlackRock TDFs and that plaintiffs’ reliance on the BlackRock TDFs’ alleged underperformance alone was insufficient to state a claim for breach of fiduciary duty.
Continue reading “Plan Fiduciaries Continue to Defeat BlackRock Target Date Fund Class Actions”
The Seventh Circuit revived two previously dismissed ERISA breach of fiduciary duty claims in its latest decision in Hughes v. Northwestern, which had been remanded from the Supreme Court. In doing so, the Seventh Circuit issued its own pleading standard for deciding ERISA duty of prudence claims alleging mismanagement of defined contribution plans. The standard does not affect how plan fiduciaries review, choose, and monitor investment choices and recordkeeping fees, but makes it easier to second-guess those decisions without fully understanding the “circumstances prevailing” at the time the fiduciary acts.
This article originally appeared in the March 2023 edition of The Brief Case, DRI’s monthly newsletter.
Amid a circuit split, the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit) has firmly taken a side as to its treatment of benefit claim denials brought under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132(a)(1)(B). In Tekmen v. Reliance Standard Life Insurance Company, 55 F.4th 951 (4th Cir. 2022), the Fourth Circuit endorsed seeking judgment, not via summary judgment or a quasi-summary judgment procedure, but through Federal Rule of Civil Procedure 52 if the case involves de novo review of a benefit claim with factual disputes. Rule 52 allows a court to conduct a “trial on the papers” and thus issue findings of fact and conclusions of law.
