As was expected, Tussey v. ABB will go a little longer…
While the 8th circuit denied both the plaintiffs’ and ABB’s request for a rehearing, this case is far from over. It has been suggested that this case will be appealed to the U.S. Supreme Court, and it may, eventually, but probably not until the district court addressed the substantive issues still outstanding.
The district court will rehear the investment mapping portion of the case that awarded plaintiffs’ $21.8MM. As stated in the 8Th Circuit’s decision, authored by Chief Judge Riley, the district court didn’t following ERISA’s well established, prudent person standard1, “The prudent person standard is not concerned with results; rather, it is a test of how the fiduciary acted viewed from the perspective of the time of the challenged decision rather than from the vantage point of hindsight.”, Judge Riley continued, “The district court’s opinion shows clear signs of hindsight influence…”.
Fiduciaries should have a clear process and must documenting every step of the way!
1 Fiduciaries must carry out their duties ‘with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.’).
FRA Plan Tools Blog discusses this topic:
By Greg Rhinehardt