(citation omitted) (quoting Tracey v. Mass. Inst. of Tech., 404 F.Supp.3d 356, 361 (D. Mass. 2019)).
Therefore, to determine whether a fiduciary acted prudently, a court will evaluate conduct under the “totality of the circumstances” and assess a fiduciary's procedures, methodology and thoroughness, Traceyv.Massachusetts Inst. of Tech., 404 F.Supp.3d 356, 361 (D. Mass. 2019) (Gorton, J.), not the results of the investment's performance. Barchock, 886 F.3d at 44 (citing Bunchv.W.R. Grace & Co., 555 F.3d 1, 7 (1st Cir. 2009) (“[T]he test of prudence - the Prudent Man Rule - is one of conduct, and not a test of the result of performance of the investment.”)
In other words, the "prudent person" standard is an objective standard which focuses not on the results of an investment strategy but on the fiduciary's decision making process. See Tracey v. Massachusetts Inst. of Tech., 404 F.Supp.3d 356, 361 (D. Mass. 2019) (Gorton, J.).
. “In a revenue sharing system, the recordkeeper retains some of the investment income of the retirement plan to satisfy the plan's administrative expenses.” Tracey v. Massachusetts Inst. Of Tech., 404 F.Supp.3d 356, 362 (D. Mass. 2019). Plan participants pay service providers direct compensation through direct fees, and indirect compensation through loss of revenue and, by extension, loss of retirement income.
Nonetheless, the reasonable length of retention and sufficiency of monitoring processes are generally fact-specific determinations that defy bright line rules. See, e.g., Tracey v. Mass. Inst. Tech., 404 F.Supp.3d 356, 362 (D. Mass. 2019). The Court will decline United's invitation to hold as a matter of law that United retained the equal weighted TDFs for a reasonable length of time.
• Tracey v. Mass. Inst. of Tech., 404 F.Supp.3d 356, 363 (D. Mass. 2019). That opinion involves the denial of the defendant's motion for summary judgment, finding that “the opinions of the parties' experts as to the proper industry protocol and the amount of fees that should be considered reasonable are in stark contrast.” Id. at 363.
A duty to monitor other fiduciaries is derivative of plaintiffs' other claims. Tracey v. Massachusetts Inst. of Tech., 404 F.Supp.3d 356, 364 (D. Mass. 2019).
Oral Arg. Tr. 14 (plaintiff does not dispute "that the fees for plans are generally paid by a combination [of] direct and indirect mechanism[s]"); see, e.g., Rosenkranz v. Altru Health Sys., No. 20-CV-168, 2021 WL 5868960, at *4 (D.N.D. Dec. 10, 2021) ("[R]ecordkeeping fees can either be paid directly by the plan's assets, indirectly by the plan's investments (called revenue sharing), or by some combination of both."); Wehner v. Genentech, Inc., No. 20-CV-06894 (WHO), 2021 WL 507599, at *8 (N.D. Cal. Feb. 9, 2021) ("[R]evenue sharing[ ] can result in a portion of investment management fees going to the recordkeeper for administrative services."); Tracey v. Massachusetts Inst. of Tech., 404 F. Supp. 3d 356, 362 (D. Mass. 2019) ("In a revenue sharing system, the recordkeeper retains some of the investment income of the retirement plan to satisfy the plan's administrative expenses."). Plaintiff acknowledges that the 401k Averages Book $35 figure reflects only the average direct fees paid by the smaller-plan participants.
This session has, however, found § 1108(b)(8) applicable in a similar case in which a plan sponsor allegedly caused the plan to invest in funds affiliated not with the plan's sponsor but with the plan's trustee. See Tracey v. Mass. Inst. of Tech., 404 F. Supp. 3d 356, 363-64 (D. Mass. 2019). Plaintiffs have cited no authority to demonstrate that § 1108(b)(8) proscribes the transaction at issue here, nor have they attempted to rebut Schneider's claim of compliance with that statutory provision.
In Tracey v. Massachusetts Inst. of Tech., another session of this Court described Fidelity's BrokerageLink platform as "designed for investors with a higher appetite for risk and independent management." 404 F. Supp. 3d 356, 359 (D. Mass. 2019) (Gorton, J.). In Brotherston v. Putnam Invs., LLC, this Court noted that only two percent of plan assets were invested in a self-directed brokerage account offered by the defendant company.