A federal court has ruled in favor of SunTrust Bank in the SunTrust 401(k) Plan self-dealing case, specifically with regard to the claim that certain defendants were aware of predecessor fiduciaries’ breach of duties through the selection of the series of allegedly excessively expensive and poor performing proprietary funds verses other available funds. These defendants allegedly breached their own fiduciary duties through failure to remedy (within the class period) their predecessors’ breaches. The judge ruled that the “’mere fact”’ of the plan’s inclusion of such funds and the defendants’ awareness of that does not constitute “constructive knowledge” of the predecessors’ allegedly flawed fund selection process. Of note, despite the judge’s ruling, the text of the decision mentions the “lack of detail in committee meeting minutes with respect to genuine deliberation over the investment menu during the class period.”
www.planadviser.com; July 16, 2019.