Steel Dynamics Inc. has successfully dodged a 401(k) lawsuit after an Indiana federal judge dismissed claims that the steel producer mismanaged its $2 billion retirement plan by selecting underperforming funds. The ruling, issued by U.S. District Judge Cristal C. Brisco on Thursday, found that the plaintiffs did not provide sufficient evidence to prove the funds performed significantly worse than others available on the market.
Lack of Proof on Underperformance Leads to Dismissal
The lawsuit, brought under the Employee Retirement Income Security Act (ERISA), alleged that Steel Dynamics’ investment committee breached its fiduciary duties by choosing poorly performing funds for the company’s retirement plan. The plaintiffs argued that the funds they challenged underperformed compared to others over periods of six to ten years. However, Judge Brisco ruled that these allegations lacked the necessary proof of “persistent” and “material” underperformance, which is required to sustain a fiduciary breach claim.
