In an important recent development, fiduciaries of a 401(k) plan claimed victory following a bench trial in a Pennsylvania federal district court, defending themselves against allegations of imprudent management and excessive recordkeeping and investment management fees in the case of Nunez v. B. Braun Medical, Inc. JDSupra reports.
This triumph constitutes another assertion of fiduciary discretion in the face of an increasing litigation trend scrutinizing the administration fees and investment management strategies of corporate sponsored 401(k) schemes.
This victory by the B. Braun Medical fiduciaries follows a similar ruling in favor of fiduciaries of Yale University’s 403(b) plan, further demonstrating the judicial deference given to retirement plan fiduciaries, provided they adequately demonstrate the prudence and reasonableness of their decisions.
Analysis of these outcomes may serve as a valuable precedent for fiduciary response to similar lawsuits. By demonstrating diligent process, prudent decision making, and reasonable expense management, fiduciaries can successfully defend against allegations of breaching their obligations.
Both cases underline the high importance of establishing clear and comprehensive procedures to document fiduciary decisions and to ensure reasonable fees within the context of the provided services. It also underscores the necessity for fiduciaries to be proactive in consistently performing and documenting prudent actions.