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Sotomayor noted, "At times, the circumstances facing an ERISA fiduciary will implicate difficult tradeoffs, and courts must give due regard to the range of reasonable judgments a fiduciary may make based on her experience and expertise." "In evaluating whether the plan participants' allegations were sufficient to survive a motion to dismiss, the court applied well-settled pleading rules and did not adopt an ERISA-specific standard," Gibson Dunn observed. "The decision does not purport to break new legal ground, does not decide whether plaintiffs stated a viable claim, and does not address what allegations would be sufficient to plead a viable claim under plaintiffs' theories (including theories focused on recordkeeping fees)," noted law firm Gibson Dunn in a legal insight. Thus, the 7th Circuit must re-evaluate the plan participants' allegations and apply Tibble's guidance, the high court ruled.

"Instead, the Seventh Circuit focused on another component of the duty of prudence: a fiduciary's obligation to assemble a diverse menu of options," Justice Sonia Sotomayor wrote for the court. In Hughes, the high court noted that the 7th Circuit did not apply Tibble's guidance. Edison Int'l, the high court said that "a fiduciary is required to conduct a regular review of its investment." Under ERISA, determining whether plan fiduciaries violated their duty of prudence requires "a context-specific inquiry of the fiduciaries' continuing duty to monitor investments and to remove imprudent ones," according to Supreme Court precedent. (Justice Amy Coney Barrett did not participate.) However, the Supreme Court vacated the 7th Circuit's ruling in an 8-0 opinion. Circuit Court of Appeals rejected the participants' claims, noting that they had multiple investment options and could have chosen to invest in other funds. Causing confusion by offering too many investment options.Offering mutual funds and annuities with high fees even though identical lower-cost options were available.Failing to monitor and control the fees they paid for record keeping, which forced participants to pay unreasonably high costs.Northwestern University, current and former employees who participated in the university's defined contribution retirement plan alleged that plan fiduciaries violated ERISA by: Here's what employers need to know about the ruling handed down Jan. The participants claim that plan fiduciaries breached their duty of prudence under the Employee Retirement Income Security Act (ERISA) by charging excessive fees and offering some poor investment choices.

Supreme Court gave new life to a proposed class-action lawsuit brought by participants in Northwestern University's retirement plan.