OPINION AND ORDER Plaintiffs Alfretta Antoine, Shannon Cave, Christina Forney, and Judy Gallegos, who are current and former participants in the Marsh & McLennan Companies Savings and Investment 401(k) Plan (the “Plan”), bring this putative class action individually and on behalf of the Plan pursuant to the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§1001, et seq. (“ERISA”), against Defendants Marsh & McLennan Companies, Inc. (“Marsh & McLennan”), the Board of Trustees of Marsh & McLennan Companies, Inc. (the “Marsh & McLennan Board”), the Marsh & McLennan Companies Benefits Administration Committee (the “Administration Committee”), the Marsh & McLennan Companies Benefits Investment Committee (the “Investment Committee,” collectively with the Administration Committee, the “Committees”), and John and Jane Does 1-30. Plaintiffs allege that Defendants breached their fiduciary duties to the Plan, its participants, and its beneficiaries in violation of ERISA by imprudently selecting and retaining the BlackRock LifePath Index Funds, a suite of ten funds, and by imprudently and disloyally selecting and retaining the Mercer Emerging Markets Fund, despite those funds’ underperformance and citing the latter’s alleged affiliation with Marsh & McLennan. Plaintiffs allege that Defendants thus caused the Plan’s participants to incur substantial losses in the form of otherwise higher investment returns. Plaintiffs also allege that Marsh & McLennan and the Committees breached their fiduciary duties by failing to monitor the investments. Finally, Plaintiffs allege, in the alternative, that Defendants knowingly participated in a breach of trust. Defendants have moved to dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons discussed below, Defendants’ motion to dismiss is granted. I. Background A. Facts1 Plaintiffs are former and current participants in the Plan. Compl.
9-12. Marsh & McLennan is a Delaware corporation with headquarters in New York. Id. 13. John and Jane Does 1-10 are members of the Marsh & McLennan Board. Id. 14.2 The Administrative Committee “is responsible for the general administration and operation of the Plan.” Id. 15. The Investment Committee “is responsible for the selection and monitoring of the investments made available to participants in the Plan.” Id. Each Committee is alleged to be “a fiduciary under ERISA pursuant to 29 U.S.C. §§1002 and 1102.” Id. Members of the Committees are appointed by Marsh & McLennan or its delegate, and the Committees “administer the Plan on Marsh & McLennan’s behalf.” Id. The Marsh & McLennan Board members also exercised “discretionary authority to appoint and/or monitor the Committees.” Id. 14. As a result, the unnamed Board members are alleged to have been, and to be, “fiduciaries of the Plan under ERISA pursuant to 29 U.S.C. []§1002(21)(A).” Id. John and Jane Does 11-30 are the members of the Committees, and are alleged to be “fiduciaries of the Plan by virtue of their membership on the Committees or otherwise are fiduciaries to the Plan.”3 Id. 16. 1. The Plan “The Plan is a participant-directed 401(k) plan, meaning participants direct the investment of their contribution into various investment options offered by the Plan.” Id. 21. This type of retirement plan is known as a defined-contribution plan. Id. 4.4 For such plans, “[e]ach participant’s account is credited with their participant contributions, applicable employer matching contributions, any discretionary contributions, and earnings or losses thereon.” Id. 21. Plan administrative expenses are paid “from Plan assets, and the majority of administrative expenses are paid by participants as a reduction of investment income.” Id. Participants can choose to invest their contributions in a variety of options, which include “various mutual funds, collective trust funds and the Marsh & McLennan Companies Stock Fund.” Id. Defined-contribution plans differ from “traditional…retirement plans” that operate as defined benefit plans. Id. 2. An employer that offers a defined benefit plan “typically promises a calculable benefit and assumes the risk with respect to high fees or underperformance of pension plan assets used to fund defined benefits,” whereas “the participants in defined contribution plans bear the risk of high fees and investment underperformance.” Id. 2. Alleged Breaches of Fiduciary Duties “Since at least December 31, 2009,” one of the investment options available to Plan participants has been the BlackRock LifePath Index Funds, which is a “suite of ten” different funds (the “BlackRock TDFs”). Id. 31. The funds are all target-date funds (“TDFs”); each such fund is comprised of “a portfolio of underlying funds that gradually shifts to become more conservative as the assumed target retirement year approaches.” Id. 26. The individual funds that comprise the overall suite are referred to as different “vintages” based on the different target retirement year used for each fund. E.g., id. 44 (discussing the 2025, 2040, and 2055 vintages). The BlackRock LifePath Index was, as of the end of 2021, one of “the top six largest TDF series,” with 8.8 percent market share and $287 billion under management. Id. 39. The BlackRock TDFs have been designated as the Plan’s Qualified Default Investment Alternative (“QDIA”) throughout the Class Period. Id. 35. “Under [Department of Labor] regulations, retirement plan fiduciaries can designate one of the investment offerings in a plan’s lineup as a QDIA…. If participants do not indicate where their assets should be invested, all contributions are automatically invested in the QDIA.” Id. 35. This designation means that “[t]he BlackRock TDF with the target year closest to a participant’s assumed retirement age (i.e., age 65) has served as the QDIA in the Plan” since early August 2016.5 Id. 35; accord id. 2. A substantial portion of the Plan’s assets have been invested in the BlackRock TDFs: “by December 31, 2020, approximately 17 percent of the Plan’s assets were invested in the BlackRock TDFs.” Id. 36. Plaintiffs allege that it was imprudent to retain the BlackRock TDFs as an option for Plan participants in the face of sustained underperformance by the BlackRock TDFs. Id. 37. This impact of the retention of the BlackRock TDFs is alleged to have been “[e]xacerbat[ed]” by the QDIA designation. Id. 35. The Complaint presents data to substantiate Plaintiffs’ underperformance allegations. Specifically, it includes a comparison of the BlackRock TDFs to four of the five other funds that, along with the BlackRock TDFs, comprise the six largest TDF series in the market: the Vanguard Target Retirement series (“Vanguard”), the T. Rowe Price Retirement series (“T. Rowe Price”), the American Funds Target Date Retirement series (“American Funds”), and the Fidelity Freedom Index series (“Fidelity Freedom Index”). Id.
