10.09.2024 01.44 CDT
Two cases reach opposite conclusions on whether employers must use forfeitures to play plan expenses—and are (effectively) precluded from using them to reduce employer contributions.
New Front on Fiduciary Litigation?
Two cases reach opposite conclusions on whether employers must use forfeitures to play plan expenses—and are (effectively) precluded from using them to reduce employer contributions.
In two recent court decisions (Hutchins v. HP Inc and Perez-Cruet v. Qualcomm Inc) plaintiffs claimed that employers’ decision to use forfeitures to reduce employer contributions (and not to pay for plan administrative expenses) was a breach of ERISA fiduciary responsibility. The courts reached opposite conclusions in these cases—with one court (Hutchins) dismissing the complaint and the other (Perez-Cruet) denying the motion to dismiss and allowing the case to proceed.