Under ERISA, prudence is process. As many courts have said, the prudence of a fiduciary’s actions is not judged by hindsight. To the contrary, the central aim of ERISA’s fiduciary prudence standard is to oversee the means by which fiduciaries of defined contribution retirement plans carry out their duties and not to scrutinize the substantive outcome of their decisions. PBGC v. Morgan Stanley, 712 F.3d 705, 716 (2d Cir. 2013).

In the selection of investment vehicles and in the engagement of vendors for defined contribution plan administration, there are possibilities of conflicts of interest or insufficiently researched decisions. There are also in many instances thoroughly prudent reasons for actions taken, with fiduciaries employing robust processes to make those decisions. Therein lies the thicket the Supreme Court faced in its recent decision in Hughes v. Northwestern University,  ___ U.S. ___, 2022 WL 199351 (Jan. 24, 2022). What cases should proceed and which should not?

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]