ERISA Class Action Watch

Schlicter Bogard Denton has filed an amended complaint in their suit against ABB. This new complaint is much simplified, but also much less damning. The core allegation is now that ABB had a fiduciary duty to invest in collective trusts instead of publicly traded mutual funds because the trusts would have been cheaper. The new complaint also argues that ABB should not have offered actively managed mutual funds because passive funds have better returns. Frankly, it is hard to see how Schlichter can prevail with these arguments. If these notions were accepted by the courts, the fiduciaries of virtually every large 401(k) plan in the country would be breaching their duties by offering actively managed mutual funds as investment options.

•  Kennedy v ABB amended complaint