PLANSPONSOR - February - March 2022 - 7

comfort in the way the court's ruling,
right at the end, expressly acknowledges
the challenging position in which ERISA
fiduciaries operate. She believes the 7th
Circuit's reconsideration of the case could
determine that the fiduciaries lived up to
their duties of prudence and loyalty.
For Emily Costin, a partner in the
ERISA litigation practice team at Alston &
Bird, one key takeaway from the Supreme
Court ruling is the importance of keeping
good minutes in committee meetings-
and keeping good track of these minutes.
Such minutes, alongside the testimony
of fiduciaries and other documentary
evidence regarding the plan management
process, will all play a key role in the
future of this case, assuming it does not
end in a settlement.
" Of course, just because you take
minutes doesn't mean you're acting
prudently, " Costin warns. " Rather, the
minutes are meant to help you go back
and remember why you made decisions
and what type of deliberation occurred.
You don't need to capture every little
detail in your minutes, but it is a best
practice to include enough detail to show
a prudent process was followed. "
Although he does not agree with
their take, Andrew Oringer, a partner in
Dechert's ERISA and executive compensation
group, says he expects plaintiffs'
attorneys to view the ruling as favorable to
their cause-as evidenced by Schlichter's
statement about the case.
" Plaintiffs' attorneys will look at this
and argue that it is good for their goals of
getting past the motion to dismiss stage
and seek trials or, more often, settlements, "
Oringer suggests. " I don't think
that's necessarily true, but, on the other
hand, this ruling will do nothing to blunt
the procession of excessive fee cases being
filed, which some hoped it would do.
Depending on what happens next in the
lower courts, this could be either good
for plaintiffs or bad in terms of creating a
new pleading standard where it is easier or
harder to survive dismissal motions. "
-John Manganaro
More From Washington
And the Courts
Case Alleging Fraudulent
Hardship Withdrawals
The U.S. District Court for the Southern
District of Ohio has ruled against a
dismissal motion filed by the defendant
in a lawsuit alleging he fraudulently
requested and obtained hardship withdrawals
from his employer-sponsored
retirement plan.
As alleged in a federal grand jury
indictment, the defendant, in 2019,
submitted two separate hardship withdrawal
applications to the third-party
administrator for his employer's retirement
plan-one for purchase of his
primary residence and one to pay medical
expenses. Both are permissible reasons
for a hardship withdrawal under the plan
and the applicable tax laws and benefit
plan regulations.
However, the government alleges,
after receiving the funds, the defendant
used the money for impermissible
purposes such as personal expenses and,
therefore, falsely represented the reason
for the withdrawals on the applications.
Further, the government alleges, the
defendant forged a plan trustee's signature
on the applications.
The defendant faces charges of
wire fraud, making false statements and
concealing facts in a legal proceeding. In
his dismissal motion, he argued that he
cannot, as a matter of law, be convicted
of wire fraud, because he did not deprive
a victim of money or property, as the
government would be required to prove,
because he owned the funds he obtained.
In denying the motion to dismiss, the
court wrote that, in a similar case, after the
defendant was convicted by a jury of wire
fraud, among other charges, the court
reversed course and granted the defendant's
motion for judgment of acquittal
on the wire fraud conviction-it had
found the government failed to prove that
the defendant's deceit deprived another
person or entity of a property interest.
However, the court in the current case
pointed out that the court in the other case
ruled after the evidence was submitted at
trial. The court noted that the government
intends to present evidence at trial, so
whether this will support the wire fraud
charges is a question of fact for the jury.
Protecting Savings From
Climate Change Risk
The Department of Labor has published
a request for information seeking public
comment on what actions, if any, it should
take under federal law to protect employees'
retirement savings and pensions from
risks associated with climate change.
The RFI, published by the DOL's
Employee Benefits Security Administration,
follows President Joe Biden's executive
order on climate-related financial
risk. The order directs the department
to identify actions it can take under the
Employee Retirement Income Security
Act, the Federal Employees' Retirement
System Act of 1986, and other relevant
laws to safeguard the life savings and
pensions of U.S. workers and families
from the threats of climate-related financial
risk. Together, ERISA and FERSA
provide oversight to more than $13 trillion
in assets.
In early 2020, news broke that an
environmental scientist in Australia had
sued his pension fund for not adequately
disclosing or assessing the effect of
climate change on its investments.
That November, the Retail Employees
Superannuation Trust, commonly referred
to as Rest, settled the lawsuit, committing
to net-zero emissions in its portfolio
by 2050. The fund also said it would
" enhance its consideration " of such risks
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