PLANADVISER - January/February 2022 - 7

breaching ERISA's duty of prudence
by allegedly causing participants to
pay investment management and
administrative fees higher than those
available for other materially identical
investment products or services.
Specifically, the plaintiffs in the
case sued the defendants for allegedly
breaching the duty of prudence in the
following three ways: failing to monitor
and control recordkeeping fees,
resulting in unreasonably high costs
to plan participants; offering mutual
funds and annuities in the form of
retail share classes that carried higher
fees than those charged by otherwise
identical share classes of the same
investments; and offering options that
were likely to confuse investors.
Initially, the district court hearing
the case granted the respondents'
motion to dismiss-a ruling the 7th
U.S. Circuit Court of Appeals affirmed,
concluding that the petitioners' allegations
failed as a matter of law. But after
reviewing the case and the parties' oral
arguments, the Supreme Court unanimously
determined that the 7th Circuit
in fact " erred in relying on the participants'
ultimate choice over their investments
to excuse allegedly imprudent
decisions by [the defendants]. "
In its new ruling, which remands
the case back to the 7th Circuit, the
Supreme Court explains that the act
of determining whether petitioners
state plausible claims against plan
fiduciaries in this case requires " a
context-specific inquiry of the fiduciaries'
continuing duty to monitor
investments and to remove imprudent
ones, as articulated in Tibble v. Edison
International. " The Tibble case, which
the Supreme Court ruled on in 2015,
similarly involved allegations that plan
fiduciaries had offered higher-priced,
retail-class mutual funds as plan
investments when materially
identical
lower-priced, institutional-class
mutual funds were available.
As summarized in the new ruling,
the Tibble order concluded that the
plaintiffs in that instance had identified
a potential violation with respect
to
certain funds
because
" a
fiduciary
is required to conduct a regular
review of its investment. " The new
ruling states that Tibble's discussion
of the continuing duty to monitor plan
investments applies in the Northwestern
case.
Technically, the Supreme Court has
vacated the appealed judgment " so
that the 7th Circuit may re-evaluate
the allegations as a whole, considering
whether [the plaintiffs] have plausibly
alleged a violation of the duty of
prudence as articulated in Tibble under
applicable pleading standards. "
and covers 821 participants in the
construction industry, will
receive
approximately $61.8 million in SFA,
including interest to the expected date
of payment to the plan.
The plan was projected to run out
of money this year and, without the
special
financial assistance program,
would have been required to reduce
participants' benefits to the PBGC guarantee
levels upon plan insolvency-
roughly 20% below the benefits payable
The new ruling states that Tibble's
discussion of the continuing duty
to monitor plan investments applies
in the Northwestern case.
The PBGC Bails Out
Another Union Plan
Signed into law last March, the American
Rescue Plan Act (ARPA) allows
for substantial relief payments to be
targeted at stressed multiemployer
pension plans sponsored by unions.
Specifically, the law allows multiemployer
plans that are in " critical and
declining " status, as defined by prior
legislation, to get a lump sum of money
to make benefit payments for the next
30 years, or through 2051.
This past December, the first of
these payments was approved by the
Pension Benefit Guaranty Corporation
(PBGC), going to the Local 138
Pension Plan, based in Baldwin, New
York, which covers 1,723 participants
working in transportation. The pension
plan received, in January, its $112.6
million in special financial assistance
(SFA).
Alongside confirming that the
payment has now gone out to Local
138, the PBGC announced that it has
approved a second application for
emergency pension funding, this one
coming from the Bricklayers and Allied
Craftworkers Local 5 New York Retirement
Fund Pension Plan.
The Bricklayers Local 5 Plan, which
is based in Newburgh, New York,
under the terms of the plan. The agency
says the special support payment will
enable the plan to continue to pay
retirees' benefits without reduction for
many years into the future.
T. Rowe Price Agrees to Settle Suit
T. Rowe Price has reached a preliminary
settlement agreement with
retirement plan participants to resolve
a fiduciary breach claim brought
against it under the Employee Retirement
Income Security Act (ERISA).
According to the motion for preliminary
approval, T. Rowe Price has agreed
to contribute a certain amount of funds
into a qualified settlement fund. Along
with the monetary terms, the preliminary
settlement includes a requirement
that the firm offer a brokerage
window providing access for retirement
plan participants to nonproprietary
funds. The agreement requires
court approval.
The class action settlement covers
all participants and beneficiaries in the
T. Rowe Price U.S. retirement program
who had a balance in a plan account
at any time from February 14, 2011,
through the date of entry of the order
that preliminarily approved the settlement,
the memorandum of law states.
The defendants deny all allegations
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PLANADVISER - January/February 2022

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