Control of Plan Assets Key to Dismissal of Class Action Over Excessive Profits
Retirement plan participants pursued a class action filed under the Employee Retirement Income Security Act (ERISA) against a manager of a nationwide investment fund. The plaintiffs alleged the fund manager breached its fiduciary duty by acting for its own benefit and by engaging in prohibited transactions regarding the 401(k) plan. The Tenth Circuit refused to revive the lawsuit holding a manager's contractual option to impose a 12-month waiting period on withdrawals did not render it a functional fiduciary under ERISA. Likewise, the manager was not a fiduciary even though it had contractual rights to prohibit plans from offering alternative low-risk investments alongside its fund and to set a credited interest rate of money invested in it.