X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
paper marked Fiduciary Duty with gavel beside it (Photo: Shutterstock)

The growth of ERISA litigation over the past years has plagued corporate America: it’s expensive, time consuming and a drain on corporate resources. Any hopes that the Supreme Court might have squelched this trend in Hughes v. Northwestern University were surely dashed after the Court’s unanimous decision. The defendant plan sponsor was denied its motion to dismiss, and will be forced to prove that its fiduciary decisions were prudent. The case proceeds, and likely, so will many others.

ERISA litigators will parse the decision because questions were left unanswered concerning pleading standards – the technical domain of ERISA litigators. Practically speaking, the Court spoke with a unified voice. Fiduciaries have an ongoing duty to monitor the prudence of investment options in a 401(k) plan and the determination of prudence will require a “context specific” analysis. The reference to “context specific” determinations is legalese for indicating that a trial will be warranted to assess the context of any fiduciary decision. In effect, plan sponsors are going to have a harder time dismissing these lawsuits.

 

BenefitsPRO

Join BenefitsPRO

Don’t miss crucial news and insights you need to navigate the shifting employee benefits industry. Join BenefitsPRO.com now!

  • Unlimited access to BenefitsPRO.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
  • Exclusive discounts on BenefitsPRO.com and ALM events.

Already have an account? Sign In Now
Join BenefitsPRO

Copyright © 2022 ALM Global, LLC. All Rights Reserved.