A federal district court judge in Alexandria, Va. has dismissed two virtually identical ERISA lawsuits filed by current and/or former employees in two different plans who attacked sponsors' offering of a BlackRock target-series as a poor-performer compared to selected other target-date options.
The one-page rulings by U.S. District Court Judge Michael S. Nachmanoff on Dec. 1 didn't discuss reasons, but he gave the plaintiffs 14 days to file an amended appeal.
The cases are Tullgren vs. Booz Allen Hamilton Inc. et al. and Hall et al. vs. Capital One Financial Corp. Inc. et al. They are part of 11 ERISA cases making the same claims against the BlackRock target-date series among a variety of sponsors including Citigroup and Microsoft. BlackRock isn't a defendant in any of the lawsuits.
All complaints were filed by Miller Shah LLP either as lead counsel or co-counsel.
They argue that the sponsors should have removed the BlackRock LifePath Index Fund because its performance trailed, over certain time periods, passively managed target-date funds from Vanguard Group and Fidelity Investments and actively managed target-date funds from Capital Group's American Funds and T. Rowe Price.
Defendants, as well as several retirement industry trade groups, said all of these lawsuits should be dismissed because the plaintiffs selectively chose comparative data and because they based their lawsuits on hindsight.
In Booz Hamilton's defense, for example, filed with the court in October, the company said a pro-plaintiff ruling "would effectively expose all employer-sponsored 401(k) plans to sweeping liability whenever the plan's fiduciaries select anything except investment options that end up generating the very best returns during a time period cherry-picked by any given plaintiff."
The Booz Allen Hamilton Inc. Employees' Capital Accumulation Plan, McLean, Va., had assets of $7.85 billion as of Dec. 31, 2021, according to the latest Form 5500.
The Capital One Financial Corp. Associate Savings Plan, McLean, Va., had $7.9 billion in assets as of Dec. 31, 2021.