WASHINGTON, DC – November 15, 2022 – The ERISA Industry Committee (ERIC) yesterday continued its vigorous efforts to defeat recent boilerplate lawsuits targeting 401(k) plan sponsors that offered a particular suite of target-date mutual funds (TDFs), filing an amicus brief in support of CMFG Life Insurance (W.D. Wis.).
ERIC, which represents large employers that sponsor health and retirement plans for nationwide workforces, joined again with coalition partners to file an amicus brief supporting CMFG Life Insurance in Christine Abel, et al. v. CMFG Life Insurance (W.D. Wis.), 3:22-cv-00449.
“In the past five weeks we have filed seven similar briefs to emphasize that the Federal courts should be dismissing the purely hindsight-based allegations brought in nuisance cases like Christine Abel v. CMFG Life Insurance. If these suits proceed beyond motions to dismiss, they will exacerbate the surge of 401(k) litigation costs and risks, undermining retirement security for workers and retirees across the country,” said James Gelfand, President of ERIC.
There have been 11 cookie-cutter lawsuits recently filed by the same law firm in district courts around the country alleging fiduciary breaches by simply offering these TDFs. The complaints rely on a flawed allegation that because the funds underperformed four plaintiff-selected competitor funds over a particular time period, plan fiduciaries placed too much consideration on the funds’ low management fees instead of returns.
The briefs filed by ERIC and the coalition argues that:
- A complaint must plead allegations showing that a reasonable process could not have produced the decisions the fiduciaries made.
- Purely pleading underperformance is insufficient to survive a motion to dismiss.
- Allowing these claims to go forward will jeopardize the willingness of employers to sponsor retirement plans by creating never-ending litigation, spiraling insurance costs, and a counterproductive instruction to plan fiduciaries to consider past performance to the exclusion of other relevant considerations.
“ERIC remains committed to protecting plan sponsors from unsubstantiated legal claims that threaten their ability to design and administer retirement benefits for tens of millions of Americans,” Gelfand said.
Current and previous filings:
- To read the coalition amicus brief filed yesterday in Christine Abel, et al. v. CMFG Life Insurance, visit ERIC’s website here.
- To read the coalition amicus brief filed previously in James Kistler, et al. v. Stanley Black & Decker visit ERIC’s website here.
- To read the coalition amicus brief previously filed in Robert Bracalente, et al. v. Cisco Systems, Inc., visit ERIC’s website here.
- To read the coalition amicus brief previously filed in Justin Beldock, et al v. Microsoft Corp., visit ERIC’s website here.
- To read the coalition amicus brief previously filed in Andre Hall, et al. v. Capital One Financial Corp, visit ERIC’s website here.
- To read the coalition amicus brief previously filed in Peter Trauernicht, et al. v. Genworth Financial, visit ERIC’s website here.
- To read the coalition amicus brief previously filed in Tullgren v. Booz Allen Hamilton Inc., visit ERIC’s website here.