Supreme Court of the United States
Hughes v. Northwestern Univ.
January 24, 2022595 U.S. 170
Summary
Justice Sotomayor delivered the unanimous opinion of the participating Justices, holding that the availability of prudent investment options does not excuse a retirement-plan fiduciary’s allegedly imprudent inclusion or retention of other options. ERISA requires fiduciaries independently to evaluate and monitor plan investments and remove imprudent investments within a reasonable time. The Court vacated the Seventh Circuit’s judgment and remanded for a context-specific assessment of the allegations under Tibble and the applicable pleading standards, with due regard for reasonable fiduciary judgments. The Court did not decide whether the complaint ultimately states a plausible claim or address the denial of leave to amend. There were no separate opinions; Justice Barrett did not participate.
Holding
- Whether participant choice and the availability of low-cost investment options categorically defeat an ERISA duty-of-prudence claim concerning other plan offerings and fees.. They do not. Courts must assess the allegations through a context-specific inquiry into fiduciaries’ continuing duty to monitor investments and remove imprudent ones, rather than treating the availability of prudent alternatives as dispositive.
Docket 19-1401
Cited authorities
- 29 U.S.C. §1104
- 88 Stat. 829
- 29 U.S.C. §1001
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