ERISA Fiduciary Duties Update - Recordkeeper Fees, Cryptocurrency Investments and More
In Hughes v. Northwestern University, the U.S. Supreme Court confirmed that offering a diverse menu of investment options does not relieve retirement plan fiduciaries of their fiduciary duty under the Employee Retirement Income Security Act (ERISA). Specifically, they are required to undertake an independent and ongoing assessment of the plan investment options offered to participants to determine whether those options are prudent and do not charge excessive fees. The Court held that offering a diverse menu of investment options is insufficient to obtain dismissal of a claim for breach of fiduciary duty for including one or more allegedly imprudent investments. This decision will allow many excessive fee litigation cases to survive motions to dismiss, resulting in more costly litigation for the plan sponsors and fiduciaries involved with the cases.
Recently, the U.S. Department of Labor (DOL) issued a stern warning for ERISA-governed retirement plan fiduciaries, cautioning that due to the risks and other unknowns associated with cryptocurrency investment options, they should expect such investment options to be scrutinized by the DOL. Litigation challenging the DOL’s statement has been filed.
Join our experienced employee benefits practitioners for a discussion of ERISA fiduciary duties, both in the context of excessive fee litigation and as they relate to offering cryptocurrency investment options. We will discuss the evolution and risk involved with the excessive fee litigation cases; fiduciary best practices that plan sponsors and fiduciaries should implement to mitigate these risks; and the best practice guidance for navigating the interest in cryptocurrency investment options for 401(k) and other ERISA-governed retirement plans.