A federal judge in New York had dismissed a lawsuit against Marsh & McLennan Cos. by current and former participants in a 401(k) plan, alleging ERISA violations because plan executives imprudently offered a BlackRock target date series and a Mercer emerging markets fund.
U.S. District Judge John P. Cronan dismissed the complaint against the Mercer fund because none of the four plaintiffs had invested in it, according to his Sept. 30 decision in the case of Antoine et al. vs. Marsh & McLennan Companies Inc. et al. Despite their allegation about poor performance, they lacked standing to sue, he wrote.
The judge dismissed the complaint about the BlackRock LifePath Index funds because the "allegations do not rise to the level of circumstantial evidence needed to support a duty of prudence-based theory at the pleadings stage," he wrote.
The plaintiffs argued that plan fiduciaries should have removed the BlackRock target-date series because its performance lagged those of several target-date series from other providers."Plaintiffs' claims of underperformance miss the mark," the judge wrote.
"Further undercutting plaintiffs' underperformance-based theory is the fact that the (BlackRock) TDFs did not consistently underperform relative to the comparators" during the period cited in the lawsuit, he wrote. The judge added that plaintiffs, who sued in August 2022, could amend their complaint by Nov. 1.
Marsh & McLennan is one of 11 employers defending ERISA lawsuits for using the BlackRock target-date series, all filed by the Miller Shah LLP. All lawsuits are seeking class action status, and all use similar language and the same statistical comparisons of the BlackRock target date series vs. several peers' products.
So far, federal courts have dismissed these target-date fund allegations against Cisco Systems, Microsoft (twice), Wintrust Financial, Capital One Financial (twice), Advance Publications and Booz Allen Hamilton (twice). A federal judge in Hartford, Conn., allowed plaintiffs in August to amend their complaint before ruling on a motion to dismiss filed by Stanley Black & Decker.
A federal judge in Richmond, Va., denied on Sept. 12 a motion to dismiss requested by Genworth Financial.
