Supreme Court Rejects “Presumption of Prudence,” Adopts New Pleading Standards in Fifth Third Bancorp v. Dudenhoeffer

In a highly anticipated decision, the Supreme Court recently ruled that ESOP fiduciaries are not entitled to a presumption of prudence under ERISA in connection with their decisions to buy, hold or sell the employer’s securities. While the elimination of this presumption is a loss for ESOP fiduciaries, the decision imposes additional burdens on plaintiffs that will make it easier for plan sponsors and fiduciaries to defend so-called “stock-drop” cases. It also requires plan sponsors to reevaluate plan language requiring that certain funds be invested in employer securities and to reconsider hiring an independent fiduciary to manage the employer stock fund.

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Wilber H. Boies, PCWilber H. Boies, PC
  Wilber (Bill) Boies focuses his practice on business dispute counseling and business litigation throughout the country. Bill regularly represents benefit plan sponsors and fiduciaries in Employee Retirement Income Security Act (ERISA) class action litigation concerning pension plan administration, fiduciary duty, responsibility for asset losses, and changes in welfare benefits. Read Bill Boies' full bio.


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Stephen PavlickStephen Pavlick
Stephen Pavlick focuses his practice on employee benefits matters for multinational corporations. He concentrates on qualified plans, related fiduciary and other Employee Retirement Income Security Act (ERISA) issues, deferred compensation and equity arrangements, and funding strategies for post-retirement welfare benefits. He has worked extensively with cash balance plans. Read Stephen Pavlick's full bio.

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