Second Circuit Upholds Dismissal of ERISA Record-Keeping Fees Lawsuit

In Boyette v. Montefiore Med. Ctr., No. 24-1279-CV, 2025 WL 48108 (2d Cir. Jan. 8, 2025), decided by Circuit Judges Kearse, Raggi, and Lohier, Jr., the court upheld the dismissal of ERISA breach of fiduciary duty claims. Plaintiffs-Appellants, Sheila Boyette and Tiffany Jiminez, were former employees of Montefiore Medical Center and participants in its 403(b) retirement plan. They filed a lawsuit against Montefiore and its fiduciaries, alleging that the plan’s administrators breached their fiduciary duties under ERISA. Specifically, they claimed that the defendants failed to properly monitor and control the plan’s recordkeeping fees, which they argued were excessively high. The recordkeeping fees in question ranged from $34 to $63 per participant annually. The appellants compared these fees to a purported reasonable range of $25 to $30, based on other retirement plans. They argued that the fees were excessive, and that Montefiore’s fiduciaries managed the plan imprudently.

The court affirmed the district court’s dismissal of the plaintiffs’ ERISA duty of prudence claims. It held that the appellants failed to provide adequate benchmarks to demonstrate that the recordkeeping fees were excessive relative to the services provided. The court emphasized that comparisons to other plans must consider the quality and scope of services rendered. It also noted that Montefiore had actively managed and reduced the plan’s fees over time, which contradicted claims of imprudence.

The court also rejected the appellants’ argument that recordkeeping services were fungible across providers. The court pointed out the variability in fees among comparator plans, indicating that such services are not standardized.

Lastly, the court found that the appellants’ derivative claim of failure to monitor was untenable without a successful primary claim of imprudence. Since the court determined that there was no breach of the duty of prudence, the monitoring claim failed as well.