Benefits Counselor – August 2020

RETIREMENT PLAN DEVELOPMENTS

Second Circuit Allows IBM Stock-Drop Case to Proceed (Again)

On remand from the Supreme Court, the Second Circuit Court of Appeals reinstated its original judgment in the stock-drop case Retirement Plans Committee of IBM v. Jander. The case will go back down to the district court for further proceedings.

As we reported earlier this year, the Supreme Court vacated the Second Circuit's decision and remanded the case after the plan fiduciaries and the federal government raised arguments not presented to the Second Circuit. The Supreme Court had agreed to review what it takes for stock-drop plaintiffs to plausibly allege an alternative action that a prudent fiduciary "would not have viewed as more likely to harm the fund than help it," as required by Fifth Third Bancorp v. Dudenhoeffer. However, the fiduciaries and the government instead argued that the Employee Retirement Income Security Act (ERISA) does not require employee stock