The District Court for the Southern District of Iowa recently dismissed an ERISA putative class action lawsuit challenging 401(k) performance and fees after plan participants failed to identify appropriate benchmarks in their complaint.
The court reinforced the Eighth Circuit’s standards for stating such claims, requiring that the plaintiffs allege facts establishing “a meaningful benchmark for assessing the performance of the challenged funds.” In particular, the court highlighted the Eighth Circuit’s requirement to identify a comparable fund with a materially similar style, structure, and goal. Without any comparable fund, the court had no way to evaluate the plaintiffs’ allegations and, therefore, the complaint could not satisfy the pleading requirement.
This lawsuit is just one of nearly 100 proposed class actions filed in 2020 challenging 401(k) fees. Jackson Lewis continues to monitor the landscape of these cases and their impacts on plan sponsors and fiduciaries.
The case is Matousek v. MidAmerican Energy Co., No. 4:20-cv-00352 (S.D. Iowa July 2, 2021).