George et al. v. Kraft Foods Global, Inc. et al.

Case Updates

NCLC filed an amicus brief supporting rehearing en banc with the Seventh Circuit. The issue is whether the fiduciaries of Kraft Foods Global Inc.’s 401(k) plan breached their fiduciary duties by failing to document their decision about the “unitized” structure of the plan's company stock fund. Many company stock funds are structured as unitized stock funds -- that is, instead of owning actual shares of company stock in their individual 401(k) accounts, participants owned funds comprised of the stock and a small amount of cash to allow for liquidity. The Seventh Circuit did not suggest the “right” choice for the fiduciaries to have made in administering the stock investment options, but sent the case back to the trial court to resolve the question. In its amicus brief, NCLC argued that because an overwhelming majority of company stock funds are operated on a unitized basis, this case has widespread applicability. A second issue in the case is whether the fiduciaries of an employee benefit plan are required to conduct a competitive bidding process to select plan service providers.