Unlike TDFs, which automatically adjust asset allocation based on a participant’s retirement age, managed accounts create personalized investment strategies by assessing factors such as:
- Risk tolerance
- Account balance
- Outside assets
- Pension wealth
- Social Security income
Judge Trenga emphasized that Hanigan failed to show the managed account and TDF provided comparable services, undermining her argument that a TDF was a better alternative.
Prior Dismissal Echoed in Latest Ruling
The dismissal mirrors the judge’s October decision, where he highlighted similar flaws in Hanigan’s claims. Bechtel had argued that her lawsuit relied on “apples-to-oranges” comparisons, and the court ultimately agreed.
Hanigan’s fee comparisons were also found lacking because they did not equitably evaluate the total fees paid under each option. Additionally, her claim that 65% of plan participants did not provide the personal information needed to tailor managed account allocations did not sufficiently address the differences between managed accounts and TDFs.
Class Action Effort Falls Short
Hanigan sought to represent a class of approximately 7,000 retirement plan participants but was unable to meet the court’s standards for demonstrating ERISA violations.
Legal Representation
- Hanigan was represented by Paul M. Secunda of Walcheske & Luzi LLC and Andrew Larry Fitzgerald of Fitzgerald Hanna & Sullivan PLLC.
- Bechtel was represented by Alison Douglass, James Fleckner, Jaime A. Santos, Jordan Bock, and Matthew Luke Riffee of Goodwin Procter LLP.
