This lawsuit involves claims against the employer, Astellas US LLC, its board of directors and retirement plan administrative committee as well as the Astellas US LLC defined contribution plan’s discretionary investment manager, Aon Hewitt Investment Consulting. Allegations directed toward Aon Hewitt involve the Plan’s offering of Aon’s proprietary CITs for its own benefit. Astellas defendants, although having the authority to retain investments not recommended by Aon, agreed to allow Aon to select investments for the Plan “exclusively from Aon’s proprietary CITs” without any obligation to consider non-proprietary investments for the Plan. The claims against Aon have been allowed to proceed, based on the conflict-of-interest argument as Aon would benefit from having plan assets as “seed money” for the Aon investment management business, given that the Aon CITs had less than 5 years of performance history as well as underperformance versus comparable funds they replaced. Claims against the Astellas defendants regarding the permission and partnering with Aon, “knowingly participating” in Aon’s breach, were not allowed. However, breaches of fiduciary duties of prudence and loyalty claims with regard to the offering of more expensive investment options when other less expensive options were available, were allowed. The prohibited transactions claim against Aon was allowed to move forward to the extent “it is premised on the selection of the Aon CITs” and allowed against Astellas to the extent the claim is “premised on the payment of plan assets to Aon.”
www.plansponsor.com; April 16, 2021.