is university of pennsylvania seventeen dash thirty to forty didn't mean complete in this case they the selection of retail shares overinvesting shares when they were identical yet more expensive to maintain is that really the core of what your clients and the others are the fact that the expenses for keeping the records of the accounts for this retirement plan that p i and vanguard receive because the produce sherry's weren't monitoring much they were receiving payment from these mutual funds why do you say that failure to solicit competitive bids in and of itself is a why would that one event be a breach then we don't say that failure to solicit competitive bids is indicative of whack of diligence on the part of the few shares because if you want to if you want to invest with certain funds like t i a a and vanguard and they say all right you take our product you've got to take our record keepers doesn't that put you in a whole different category because is it your claim that the evaluation of the access to vanguard the access to t i a a was with the fees charged for that access do and this is also something that came up in the toss and it's your position that that these figures exceed what is available for other funds of the type to be funded might wan invest in yes well that's certainly true as to the fifty eight mutual funds that are cheaper share classes right so for those it's the exact same investment or less cost of the protests and so it's clear  plan does all the planning for them to the participant makes all its choices on the basis of that of the information provided on what's available and i gather you have no complaint about the information that's been made available yet and that's true so you're complaining about plans to cost too much but you don't tell us to what level these plans were made available here with bad investments what you say are bad investments and you're forcing those investments on people it's a very different situation than if in that we want to do it all ourselves the fourth year if if you're giving them the information where they confuse and how can you expect us unless we know what here you're talking about whether this is a good investment or well there's a problem with that your honor the different share classes for particular for the fifty eight mutual funds were not all offered in the plan so participants had no choice as to whether they were going to have the tears are just participants choosing which types of investment to invest and saying if you're one of the target date bonds you just put your money in there and you never look at it again because it's just going to be allocated there's not an issue about share class differential for those funds in something like your three or cure for where you have an s and p five hundred index on the produce yury select the one that cost seven basis points when the exact same fund was available single choice and it is the more expensive choice you had no opportunity to get the cheaper version of that box none whatsoever because the fiduciaries didn't do their job by selecting the cheaper version of the vanguard see what the fees were for the season and to make to pick a an investment that had what they considered favorable fees is supposed unfavorable fees they were not being forced to invest in that in the funds that had high fees and and your honor i as a participant want to invest in the vanguard five hundred index fund because i believe that that's a good investment i have no choice as to whether choice they are put there some else can decide what is available this is a whole panoply of choices and you can decide what is available they're giving you the information on a good mix like we we haven't run for that you can make the decision i want to put my money here or here or here it's not sensible to make an investment decision based on the feel on so participants and so i'm going to find whatever investment is out there that pays only five than there was a run for so i mean how do you distinguish this case vs run from because rapper pointed out the challenge was just the mix of investments i was in there was an allegation of imprudence of any particular because there are more choices you want limited to those two right but your honor is saying that just because you have one basis point behind in there that's it there's no breach in saying because you have a variety of different investments with different benefits and different problems that that and we're talking about the the retiring the employee he's going to pay a lot of attention to what they're doing if you present them with a good choice of options that's what you're under agreements were entered into with the vanguard in t i a a to provide services to that to the plan there is no allegation there was a preexisting relationship correct or ok as a result anything that happened to enter that agreement and the negotiation and the entry itself is not a creative transaction you agree with that yes then how can you persist in making prohibitive transaction claims that either  how how is the plan going to be able to deal with the people offering the investment plans once they have made an initial deal with them w an agreement that you can get out of just out of that one transaction because a lot of the case law and i'll tell you why i'm asking you very kind of how to slice and dice questions a lot of the cases in this you are familiar with the fact this isn't the only one where there's a challenge to a university's plan and many of the cases are slicing and dicing each of these events with respect to the lock in itself is they were breach of fiduciary duty to enter a lock in agreement that you can get out of is another factor that is on the pile facts to show that you sure you are not doing their jobs in other words because they have a lot in agreement it plausibly suggest the pretty sure he said well we're going to monitor the performance of the crap stock account right because we can't get out of it now legally guess they could have gotten out of it part of a in under this agreement they have it in their heads well we've got to keep this in here anyway so why monitor how it's perform again so that's a fact and we show kraft and vanguard in which the entirety of the plans three point eight billion in assets were invested and what what what is the prohibited transaction there participant directed retirement savings plan measured by the expense ratios of those investments there's no plausible imprints that somehow the fiduciaries process within reasonable pen followed renfro to the letter indeed and so i think the panel has already recognized the pen lineup is significantly better than the unisys mine up and the expense ratios went down over time as the number of institutional share class offerings went up and your sponsor at a serious efforts to distinguish renfro from their allegations that is they are making a challenge to specific types of investments and they're relying on case law that says if they do sheri should examine each one in and more specifically their contention is that breach occurred by not making available institutional shares which are less expensive and only need help because shares and therefore  first instance as to whether and to what extent the plan makes available meaningful choices meaning a range of investment options including risk profiles investment strategies and associated fees it's noteworthy and i think i heard some echo of this from the panel on here finis are but one part of a four part inquiry now there is no claim none whatsoever nor could the there be that somehow the offerings were insufficient or not meaningful underground pro and there is no contention and again i think i heard this previously that any participant could not create a diversified portfolio consistent with his or her age risk tolerance and objectives and again and now contrast renfro and then talk about what mr wolf says to try to get around and probe again the one that is better unisys had seventy three offerings on the lineup ranging untender one hundred twenty one basis points here penn opera seventy eight options with expense ratios ranging from four to eighty seven basis points significantly better than the unisys lineup in fact two fund xeni there were institutional share class funds available the only difference with this complaint and i submit under twamley the result cannot turn on simply the length of the pleated what they basically do here take a look at the complaint they say fund a there was an institutional share class offering fund be there was an institutional all the way  pan clams court the vanguard institutional index fund is the same thing slightly different name and for basis points again you're paying for investment management basically for free and the at in isolation the point is in the revenue sharing model it's the bundle of offerings that determine the amount of cleanness ultimately paid to the record keeper it's uncapped for the same services rendered and they were go off point but it will come back to stay on your topic and we'll get judge ross answer will get judge fischer's will get mine so i'm sorry that you are trying to say to judge me off i think something along the lines of nothing i really responded to her to get other investments available answers so far yours is going to cost more money you know what i'm saying is that there are consequences in other words if you pull out one of the fund offerings in a ridiculous aided revenue sharing model ts have to be made is that they they have no redress here if in fact you apply renfro that gives penn licensed to do all kinds of terrible things to the participants make no mistake and they use a savings line of cases as opposed is unicef's set up the framework for discreet fund underperforms challenges there are two separate bodies of law in this circuit and i think it's fair to say that the plaintiffs are trying to conflate the two but make  mistake if you create a lineup for example that doesn't fit well or compare favorably to the renfro lineup happens all the time other circuit opinions we say are readily distinguishable they offer but a handful of offerings higher expense ratios what this court did again and recognizing the participants role in determining their own in furtherance of their own objectives and this do it for me line up by the way is these are can also see for inadequate disclosures about the way i heard perhaps a concession from the plaintiffs the participants knew everything they needed to know to make their custom asset allocations you might state a claim by can brayden or table the supreme court case when the plan sponsor benefited some way in a licit relationship it's important here to know that penn state's pays a normal amount in matching contributions and that dispels any notion of some sort apply you cannot determine on twelve b six that what we did was reasonable so they're saying effectively we didn't monitor right but the duty of renfro in this circuit is to offer that what are we doing a continuum again those participants that want low cost index fund investing can go there at four basis points at the low end there are w professors who believe in active investment management the much more expensive them this is the the way the fourteeners work and that's so it's available to everyone i mean the facilities management people if someone can you know they they can dabble in active management or vanguard five hundred fine but you say it's too expensive is there a comparable a ray of investment you can pick the same thing at the lower there are seventeen f and it's all spelled out in the record under ten basis points basically free including sort of the institutional quibbling of the vanguard instead index five hundred fun at four basis points which by the way he says you can get it down to two basis points the for do series are exercising discretion consistent with the statutory grant to set up these there's these complex plans which by the way i would be remiss if i didn't say these oper annuities annuities are enormously complex vehicles to administer and not withstanding the they'll ability of these products on this line up and they are expensive to record alleges that by having this uncapped revenue sharing that exists it's allowing the these collected and paid to the record keepers to increase for identical services there is nothing changing submit that on the uncapped fees argument precisely the same allegations normans were before this court in my problem with they said there was eunice's should have been at seventy dollars per participant as opposed to two hundred honor precisely the same arguments were rejected in mine probably and again they made the same thing you know whether it should have been tapped at a number two hundred dollars in in unicef's it's the same persuasively the same theory by the way what they're basically saying at some level is that the revenue sharing model it is is improving i know way asset values go up and down using revenue sharing and the so called uncapped fees and especially  at the event in two thousand need two thousand and nine there you can't create suppose that for ever and always the record keepers the recipients of the revenue sharing sort of are being over compensated over time markets go up and participant direction by the way again that that would be something that would be presented outside the plains to explain why the cap is not problematic because it goes up and down well as i'm asking the court to take traditional notice of the fact that markets go up and markets go down a explanation for why it was good business practice to bundler was a good business practice to have two record keepers because they had access to the the unique information for their respective plans but didn't the poor really go outside of what it's permitted to do now and where in tom dooley which was an antitrust case the supreme court applied that sort of is this conduct consistent with unilateral consider coincidental activity or as a but we know that there is another circuit the it's are going to said you don't you don't apply that sort of prism to evaluate a risk case didn't the district court or just at that point by the by the standard applied in evaluating the if you look at the guideposts earliest stop stablished in renfro and by the way some of the observations she made for example bundling bundling was recognized in when for o in other words there are involved in principles plaintiffs have made much of an argument here the judge crowder has exceeded her already in that regard in terms of sort of again looking at something outside of the universe again that the suggestions about what's going on in the marketplace  hearing all the same theories all the same experts the court entered an opinion in favor of the defendants are just give the court decide to make one point two thousand eight hundred west or three six two nine five nine eight and why you this is important and i the second is the savings plan opinion of this court specifically said that a district court opinion speaking to the prudence of an investment or practice is itself evidence of objective  judge warts on that last point you're correct the district court believes that recovery in our cases going to be very remote and unlikely in the court's opinion and then actual proof of our held that the produce surely did not make their higher cost share class selections for the purpose of benefiting their employer so that was not part of the case still even without any intent to benefit the employer choosing the more expensive version of a mutual fund more expensive sure class is a breach under two the referee complaint doesn't compare to the suite a complaint if your honor would just look at appendix pages eighty eight through ninety six your honour's would see a long chart of the specific mutual funds that specific share classes that were much cheaper and what the fiduciary is offered compare that to the raw pro complaint that starts on the panics page two eighty eight you'll see no such allegation and learning allegation or harding they'll you know put the services up to bid no allegation of what the recordkeeping fees were paid out of the room pro plan uses plan nor any allegation about what a reasonable recordkeeping be would have been about it and why you mention record keeping you are an allegation the complaint that says you record keepers was costly and inefficient yes i didn't see any facts to tell me how was inefficient i saw a series of paragraphs that talk about how their universities have chosen to use one record keeper and they may have found a benefit from that but i know what that benefit is so what is it what is the factual basis for that claim to be a breach  e sources that we quote say that it's cheaper to how one record keeper and that a number of universities went to a single record keeper and realise savings to the plans from that in combination show that fats approve of their under performance that is the breach so that the new sure is responsible for what and stay in the plan they're keeping him in the plan over time so that's the bridge if it were just you entered into a lock in agreement more than six years that would be time barred yes so any of the agreements entered into over more than six years back would be bored if the claim were just about entering into that agreement and that's not what our church works on the record keeping if you ask back i got off track in my opening statement but i just want to make one clear distinction we're not saying just because they failed to put the services up to bid that that's a breach on its own it's coupled with the fact that they should could have been paying on thirty five basis points a perk has been and we're paying well over two hundred dollars not basis point thirty five dollars we're paying well over two hundred dollars and therefore there is evidence that in fact they were ca to make sure i understand your pleading your claim isn't that they should have used perper to supplant methods of peanut there should have been a cap and as i understand your allegation your complaint you were giving us that seven hundred thousand seven or fifty thousand all range as an spend so thirty five dollars per participant times the number of participants life will enter your contract for some seven hundred fifty thousand dollars and then any revenue sharing that comes in from your mutual funds that exceeds that amount you responded back pro rata if you want so that the more expensive higher dollar accounts are pegboard the record keeping busy and smaller counter paying less of a b or per dollar or however you want but it's just that purpose number is just the rate at which you negotiate the full contract amount to determine what a reasonable amount is and then get the excess revenue sharing that exceeds that amount as relates back to the p