This previously reported lawsuit will proceed with regard to several allegations. Plaintiffs in this case, participants in the Schneider Electric 401(k) Plan, allege that Aon Hewitt Investment Consulting (AHIC) and plan fiduciaries breached fiduciary duties in violation of ERISA. Their selection of the Aon Trusts, target date investment vehicles that lacked performance histories, as replacements (?) for the less expensive, better performing Vanguard target date funds, is an alleged breach of the duty of prudence. With respect to AHIC, the claim that its selection of its own investment products for the Plan’s investment menu breached the duty of loyalty, was found sufficient. According to the judge, the allegations in this regard “raise a plausible inference that AHIC had an improper motive and failed to act “solely in the best interest of” the plan’s participants. Other claims against Schneider found sufficient, to some degree based on precedent, include failure to secure identical lower-cost investment options, and failure to conduct a competitive bidding process for recordkeeping services, leveraging the plan’s size.
www.planadviser.com; March 31, 2021.