Capital One won a recent dismissal in one of the many Employee Retirement Income Security Act (ERISA) suits, filed by workers, concerning the low-performing BlackRock target-date-funds (TDFs). On the same day that he dismissed a similar suit against Booz Allen Hamilton, Judge Michael S. Nachmanoff dismissed the Capital One employee suit. Still, as in the Booz Allen case, he gave the employees 14 days to amend their suit. The case is Hall et al. v. Capital One Financial Corporation et al., case number 1:22-cv-00857, U.S. District Court for the Eastern District of Virginia.
Former Capital One employee Andre Hall and employee Jermaine Minitee filed suit against the employer in August 2022, claiming that Capital One breached its fiduciary duty under ERISA because it failed to properly monitor the TDFs, which contained about 35% of the plan’s assets by 2020. The TDFs performed much worse than comparable TDFs, which led to millions of dollars in losses for Capital One retirement plan participants.
Capital One argued that mismanagement does not occur simply because one fund outperforms another during a certain period. Various retirement industry groups agreed, filing amicus briefs stating that the suit unfairly targeted a set of funds that delivers value to retirees.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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