Quest Diagnostics Prevails in Appeal Over 401(k) Fund Options

Quest Diagnostics Inc. turned back an appeal by workers challenging their 401(k) investment options, when the Third Circuit on Monday blessed the company’s plan management process despite noting the “subpar returns” of certain funds.

Quest’s retirement plan fiduciaries followed a prudent process in managing the plan and had no legal obligation to remove funds from its investment lineup based on poor performance alone, the US Court of Appeals for the Third Circuit held.

The funds’ underperformance was “hardly egregious,” the court said, and the company fulfilled its legal duties by meeting quarterly to review plan investments and requesting and ...