Another Participant Challenge to Defined Benefit Plan Investments: Could Your Plan Defend its Investment Program?

The focus of U.S. litigation challenging plan investments has been 401(k) plans, but that may be changing. Defined benefit plan sponsors may have felt that they were immune to these types of claims because the funding rules require them to make up investment losses, but defined benefit plans are now becoming targets in class action litigation.

I recently wrote about an appellate decision permitting participants in the Weyerhaueser defined benefit plans to pursue a class action for equitable relief if they prevailed on their claims that the plans were disproportionately invested in risky alternative investments in violation of ERISA.

Now we have had another complaint seeking class certification, which challenges U.S. Bancorp's investment of 100% of its assets in equities from 2007 through 2010, allegedly causing the plan to lose over a billion dollars, as well as the way its security lending program was managed.  The U.S. Bancorp suit targets a large group of