Judge allows some ERISA allegations against PNC Financial – Pensions & Investments

Written by Amanda

A U.S. District Court Judge in Pittsburgh has issued a split decision on an ERISA complaint against PNC Financial Services Group Inc., allowing some allegations by 401(k) participants to go to trial.

Judge Christy Criswell Wiegand on March 31 rejected a motion to dismiss by PNC and plan fiduciaries who contended that the three plaintiffs lacked standing to sue and that they failed to show that fiduciaries acted imprudently in managing the plan.

However, the judge supported the defendants’ request to dismiss the allegation that fiduciaries violated ERISA’s duty of loyalty, rejecting a self-dealing argument by the plaintiffs.

This is the second time the case of Johnson et al. vs. PNC Financial Services Inc. et al. has appeared before the judge.

Plan participants sued to October 2020, arguing that fiduciaries violated ERISA by charging high administrative record-keeping and administrative fees. The judge dismissed the entire complaint in August 2021 saying that it “fails to state facts from which a breach of fiduciary duty can be plausibly inferred.” However, she allowed the plaintiffs to file an amended complaint, which is the subject of her March 31 ruling.

“The amended complaint sufficiently alleges that defendants breached their duty of prudence,” the judge wrote on March 31, referring to the plaintiffs’ comparison of PNC’s average per-person record-keeping fees vs. the fees of four other 401(k) plans.

“Additionally, the amended complaint alleges that, based on the plan’s size and resulting negotiating power, defendants should have been able to obtain the same services for a significantly lower amount,” wrote the judge, in agreeing that the defendants failed to follow a prudent process in assessing record-keeping services.

The judge also supported plaintiffs’ allegation that the defendants failed to monitor co-fiduciaries because “the facts here provide a sufficient basis to infer that defendants knew or should have known about alleged mismanagement.”

The PNC Financial Services Group Inc. Incentive Savings Plan, Pittsburgh, had assets of $7.69 billion as of Dec. 31, 2020, according to the latest Form 5500.

Source: pionline.com

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Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai