Renfro, et al. v. Unisys Corp., et al.

Case Updates

The Third Circuit ruled that the plaintiffs failed to show that the defendants breached their fiduciary duty by selecting investments with allegedly excessive fees. Relying heavily on the Seventh Circuit's decision in Hecker v. Deere & Co., the Court found that the defendants offered a broad range of investment options with different fees, and ruled that the plaintiffs failed to plead a plausible breach of fiduciary duty.

NCLC urged the Third Circuit to uphold the dismissal of a class action alleging that Unisys Corporation selected investments for its 401(k) plan that purportedly charged excessive fees. The district court ruled that plan participants were offered an array of alternative investments from which to choose, and found nothing imprudent in the actions of the trustee, the company, or the plan fiduciaries. In its brief, NCLC argued that Section 404(c) of ERISA protects plan fiduciaries from loss claims when a plan participant has control of his or her investment decisions, and that plan participants could have selected a number of alternative investments. NCLC warned that the costs associated with this type of litigation have a chilling effect on the establishment of 401(k) plans.