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CommonSpirit Defeats 401(k) Fee Challenge in Sixth Circuit

June 21, 2022, 8:24 PM

CommonSpirit Health defeated an appeal challenging the Fidelity target date funds in its $3 billion retirement plan, when the Sixth Circuit said Tuesday that actively managed funds are valid components of a well-managed plan despite their comparatively higher fees.

CommonSpirit plan participant Yosaun Smith accused the plan’s fiduciaries of breaching their duties by offering the actively managed Fidelity Freedom Funds as the plan’s default investment option, because these funds are allegedly more expensive and riskier than a similar suite of passively managed funds from Fidelity. The US Court of Appeals for the Sixth Circuit disagreed, saying the two suites have ...