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Life, Health & Disability Law
The Seventh Circuit Demands Greater Specificity When Pleading Excessive Pension Fee
Claims: Albert v. Oshkosh Corp.
Brooks Magratten
By Brooks Magratten
The Seventh Circuit in Albert v. Oshkosh Corp., 47 F.4th 570 (7th Cir. 2022), affirmed the dismissal of a class action complaint alleging various ERISA claims stemming from allegations that Administrators overpaid for Plan recordkeeping, investment advisor and investment management fees.
The court previously held that
claims for breach of fiduciary
duties with respect to pension plan
offerings could not be sustained
so long as the plan offered a mix
of better performing investment
options to offset alleged “bad”
options. See Divane v. Northwestern
Univ., 953 F.3d 980 (7th Cir. 2020).
The Supreme Court vacated Divane
in Hughes v. Northwestern Univ., 142 S. Ct. 737 (2022). The Hughes court concluded that it did not matter that a plan offered a mix of good and bad investment options, the administrator’s fiduciary obligations could be breached simply by failing to prune bad options from the plan’s menu of investment options.
Faced again with a fact pattern similar to Divane, the Seventh Circuit again upheld the dismissal of a class action complaint, but for different reasons. The Albert complaint alleged that Oshkosh plan administrators breached fiduciary duties because they had not regularly sought bids or proposals from vendors for recordkeeping and investment advisor services. Consequently, plaintiffs allege, the Oshkosh plan paid more in service fees that comparable plans.
The Albert court observed that the failure to solicit bids or proposals from vendors on a regular basis does not, by itself, equate to a breach of fiduciary duty resulting
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FDCC ANNUAL FIVES 2023