Participants in Deloitte LLP’s defined-contribution, 401(k) retirement plan brought a putative class action against plan fiduciaries, alleging breach of fiduciary duty in violation of the Employee Retirement Income Security Act (ERISA). The United States District Court for the Southern District of New York (Koeltl, J.) dismissed the action and subsequently denied Plaintiffs’ motion for leave to file an amended complaint on futility grounds. We conclude that the district court did not err in concluding that Plaintiffs failed plausibly to allege that the Plan’s administrative and recordkeeping fees were excessive and that Defendants breached their duty of prudence by not obtaining lower fees. Accordingly, we AFFIRM the judgment of the district court. Judge Robinson concurs in part, and concurs in the judgment, in a separate opinion. DEBRA ANN LIVINGSTON, C.J. Plaintiffs Rupinder Singh, Jeffrey Popkin, Joni Walker, and Jenny Mark, individually and on behalf of a putative class (collectively, “Plaintiffs”), appeal from a judgment entered on July 5, 2023 by the United States District Court for the Southern District of New York (Koeltl, J.). The court denied Plaintiffs’ motion for leave to file an amended complaint and entered final judgment on the ground that further amendment of the complaint would be futile because Plaintiffs’ amended complaint, like the original, fails plausibly to allege that defendants Deloitte LLP (“Deloitte”), the Board of Directors of Deloitte LLP (the “Board”), and the Retirement Plan Committee of Deloitte LLP (the “Committee”) (collectively, “Defendants”) violated the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. 1001 et seq., by breaching their fiduciary duties in managing an employee retirement plan.1 In the underlying action, Plaintiffs, Deloitte employees during the putative class period, sued Defendants, fiduciaries of the Deloitte 401(k) Plan (the “Plan”), for allegedly violating their duty of prudence by failing adequately to manage the Plan’s recordkeeping and administrative fees, which resulted in the payment of excessive fees by Plan participants. Reviewing the proposed amended complaint de novo, we agree with the district court that Plaintiffs have failed to plead sufficient factual matter to support a plausible inference that Defendants breached their duty of prudence. Accordingly, we AFFIRM. BACKGROUND I. Factual Background2 Like many companies, Deloitte offered its employees the opportunity to participate in voluntarily-established retirement plans, including the 401(k) Plan at issue here, which is a “defined contribution plan” under ERISA §3(34), 29 U.S.C. §1002(34), in which all regular full-time employees who are not principals, partners, or managing directors at Deloitte could participate.3 Under the Plan’s terms, participating employees could elect to contribute from one to sixty percent of their compensation to the Plan, up to the maximum contribution permitted pursuant to the Internal Revenue Code. Deloitte would make a matching contribution of twenty-five percent of the employee’s contribution, so long as the amount did not exceed six percent of the employee’s annual compensation. Pursuant to the terms of the Plan, participants elected to have these contributions invested in a range of investment options. Plaintiffs allege that the Plan’s quantity of assets under management rendered it a “jumbo” plan in the defined contribution plan marketplace. Between 2015 and 2019, the Plan had between 62,114 and 81,639 participants with account balances. During the putative class period, from October 13, 2015 through the date of judgment (“Class Period”), the Plan had at least $4.2 billion in assets under management, including over $7.3 billion at the conclusion of fiscal year 2020. The Plan incurred various expenses associated with its administration, including for services provided by third parties. During the Class Period, Vanguard provided recordkeeping and administrative services to the Plan. Plaintiffs allege that the Plan covered Vanguard’s fees both directly, through payments from Plan assets, and indirectly, in a practice known as revenue sharing, from Plan investments. Plan participants paid an annual fixed sum each year for recordkeeping services, which the Plan assessed as a quarterly charge against each participant’s account. Plaintiffs, participants in the Plan during the Class Period, allege that “[n]early all recordkeepers in the marketplace offer the same range of services and can provide the services at very little cost,” that “[n]umerous recordkeepers…are capable of providing a high level of service and will vigorously compete to win a recordkeeping contract for a jumbo defined contribution plan,” and that there are “essential recordkeeping services provided by all national recordkeepers for large plans with substantial bargaining power” offered “by all recordkeepers for one price (typically at a per capita price), regardless of the services chosen or utilized by the plan.”4 FAC
66-69. Additional ancillary services are “normally charged” only to participants who use them. FAC 69. Plaintiffs claim that the recordkeeping costs for their Plan were higher than for comparable peer plans. They allege that from 2015 to 2019, the Plan’s recordkeeping cost per participant ranged from $59.58 to $70.31, as compared to six other plans with at least 30,000 participants, for which the cost per participant in 2019 ranged from $21 to $34. Plaintiffs allege that they paid excessive recordkeeping fees in connection with the Plan because Plan fiduciaries failed to “negotiate favorable rates” based on economies of scale. See FAC 74. Plaintiffs surmise that because the Plan has used Vanguard as its recordkeeper since 2004 and was allegedly paying excessive amounts during the Class Period, Defendants failed to “remain informed about overall trends in the marketplace” for recordkeeping fees by conducting a Request for Proposal process at reasonable intervals. FAC
