Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-23-01108/USCOURTS-ca2-23-01108-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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23-1108-cv

Singh v. Deloitte 

ROBINSON, Circuit Judge, concurring in part and concurring in the judgment. 

I agree that if a plaintiff relies on market comparisons to support a claim

based on circumstantial evidence that Plan Administrators have breached their 

duty of prudence by paying excessive recordkeeping fees, the comparisons must 

be apples-to-apples. Majority at 14-15. And I agree that Plaintiffs’ allegations 

here are insufficient because comparing only the direct recordkeeping costs paid 

by the Plan to the direct costs paid by other plans, and omitting any comparison 

of indirect costs—that is, fees paid through revenue sharing—gives “limited 

insight into whether total recordkeeping costs paid by the Plaintiffs were 

excessive, as compared to other plans.” Id. at 15. 

But I part ways with the majority with respect to the sufficiency of 

Plaintiffs’ allegations concerning the scope and quality of services provided to 

the respective comparator plans. In my view, the majority’s analysis fails to 

“accept[] as true” the well supported factual allegations in the First Amended 

Complaint (“FAC”) as to the bundle of recordkeeping services available to 

comparable Plans, the relationship between the mix of services provided and 

price, and the relative quality of those services. Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009). In doing so, it imposes an unwarranted burden at the pleadings stage on 

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plaintiffs seeking to protect their rights under ERISA—a statute Congress 

intended to “function as a comprehensive remedial statute.” Allen v. Credit Suisse 

Securities (USA) LLC, 895 F.3d 214, 223 (2d Cir. 2018) (internal quotation marks 

and citation omitted). 

I reach this conclusion for several reasons.

First, Plaintiffs’ First Amended Complaint1 explains in a nonconclusory 

way, and with support from an expert declaration, why we can infer that the 

scope and quality of services provided to comparator plans are comparable to 

those of the Plan here for purposes of comparing the respective plans’ relative 

costs. 

As to the bundle of services provided, the FAC alleges that all national 

recordkeepers for large plans with substantial bargaining power, like the Plan, 

include the same suite of essential services: 

A. Basic account recordkeeping (e.g. demographic, source, 

investment and vesting records);

1 Like the Majority, I draw from the allegations in Plaintiffs’ First Amended Complaint. The 

Majority declines to consider the declaration of Plaintiffs’ expert because Plaintiffs’ opening 

brief did not contest the district court’s observation that the declaration is “simply a conclusory 

statement of the plaintiff’s argument.” See Majority at 9 n.5 (quoting Singh v. Deloitte LLP, 21-cv8458, 2023 WL 4350650, at *6 (S.D.N.Y. July 5, 2023)). Because the FAC relies extensively on the

Declaration of Francis M. Vitagliano—which was filed as an exhibit to the FAC—I find it 

impossible to consider one without the other. See Chambers v. Time Warner, Inc., 282 F.3d 147, 

153 (2d Cir. 2002) (“[A] court may consider documents attached to the complaint as an exhibit 

or incorporated in it by reference.”) (internal quotation marks and citation omitted). 

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B. Multi-channel participant and plan sponsor access (e.g. phone, 

web);

C. Daily participant transaction accounting (e.g., purchases, 

redemptions, exchanges);

D. Payroll service (e.g. hardships, in-service withdrawals, 

termination distributions);

E. Participant tax reporting services (e.g., IRS Form 1099-R);

F. Participant confirmations, statements, and standard notices; 

G. Plan-level reporting and annual financial package (excluding 

IRS Form 5500); 

H. Participant education (e.g. newsletters, web articles, standard 

communication materials); 

I. Plan consulting (e.g., preapproved document services, 

operational materials); 

J. Plan consulting (e.g. preapproved document services, 

operational compliance support). 

App’x 105-106 (FAC ¶ 68). 

Critically, the FAC alleges that these services are offered by all

recordkeepers in this class for one price, typically a per capita price, “regardless 

of the services chosen or utilized by the plan.” App’x 106 (FAC ¶ 69). “Ancillary 

services,” like “QDRO’s, participant loans, and self-directed brokerage accounts 

are normally charged to only participants using those ancillary services.” Id. 

Moreover, “[a]lthough the 401(k) participant servicing can vary slightly in 

the various service levels, the actual cost to a large record keeper with a very 

robust participant servicing system remains almost constant notwithstanding the 

level and sophistication of participant servicing the employer has elected . . .” 

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App’x 107-08 (FAC ¶ 74). “Accordingly, a plan sponsor or fiduciary has the 

leverage to negotiate favorable rates given that costs of implementation do not 

change for the service provider.” Id. 

With respect to the quality of services provided, the FAC tells us that “[t]he 

recordkeepers in the top ten are all capable of providing the same quality of 

service and they must do so to succeed in the very highly competitive 401(k) 

service provider arena.” App’x 112 (FAC ¶ 91); see also App’x 132-35 (Vitagliano

Decl. at ¶¶ 29-38 (describing facts about the market for 401(k) recordkeeping 

services that inform these conclusions)). 

In light of these allegations, I take issue with the Majority’s assertion that 

“Plaintiffs allege next to nothing about the recordkeeping services provided by 

the Plan or by the six other large plans that the FAC cites as allegedly lowerpriced comparators.” Majority at 12. Plaintiffs have alleged that the class of 

recordkeepers that provide services to plans like the Plan and the identified 

comparators offer the same suite of specified services, and they’ve told us what 

those services are. And they have alleged that the actual price these large 

recordkeepers charge a Plan does not depend on the specific services elected. In 

short, the FAC asserts that significant pricing differences in recordkeeping fees in 

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plans at this level cannot be attributed to variations in the bundles of services 

accepted by a given plan, and that a line-by-line comparison of the individual 

recordkeeping services actually adopted by each comparator plan with those 

used by the Plan here would tell us little about the relative differences in plan 

costs. 

These allegations tell us all we need to know at the pleading stage to 

satisfy ourselves that Plaintiffs have alleged an apples-to-apples comparison with 

respect to the scope and quality of services provided to the Plan and the 

comparators.2 And the allegations, backed by the declaration of an expert with 

extensive experience in the relevant market who offers robust explanations for 

these conclusions, are far from the kind of “labels and conclusions” or “naked 

assertions” that we can properly disregard in assessing the sufficiency of a 

complaint. Iqbal, 556 U.S. at 678 (alteration accepted) (quoting Bell Atlantic Corp. 

v. Twombly, 550 U.S. 544, 555, 557 (2007)). 

In fact, the allegations here are more detailed than those the Seventh Circuit 

deemed sufficient to plausibly allege that recordkeeping fees were excessive 

relative to services provided in Hughes v. Northwestern University. 63 F.4th 615 (7th 

2 As noted above, I agree with the majority that the comparison as to price is not apples to 

apples.

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Cir. 2023). In Hughes, the plaintiffs alleged, among other things, that fiduciaries 

of two Northwestern University retirement plans subject to ERISA breached the 

duty of prudence by incurring unreasonable recordkeeping fees. Plaintiffs 

alleged that Northwestern paid about four to five times a reasonable perparticipant recordkeeping fee for the plans because it paid through uncapped 

revenue-sharing arrangements. They alleged that Northwestern should have 

lowered its expenses by consolidating from two recordkeepers to one, soliciting 

competitive bids, and using its size and bargaining power to negotiate for fee 

rebates. See id. at 621–22. 

Relative to the services provided in exchange for the recordkeeping fees, 

the plaintiffs alleged that “[t]here are numerous recordkeepers in the 

marketplace who are equally capable of providing a high level of service to large 

defined contribution plans like the [Northwestern plans]” and that 

recordkeeping services are “commoditized” such that “recordkeepers primarily 

differentiate themselves based on price, and will aggressively bid to offer the best 

price in an effort to win the business, particularly for jumbo plans like the 

[Northwestern plans].” Id. at 632. The Seventh Circuit concluded that these 

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allegations were sufficient to plead that “the fees were excessive relative to the 

recordkeeping services rendered.” Id. (emphasis added). 

True, as the Majority notes, the Seventh Circuit also identified other 

features of Northwestern’s plans—in particular, its reliance on two separate 

recordkeepers rather than one—to support that court’s ultimate inference that 

Northwestern violated its duty of prudence. Id. But as to the question whether 

the complaint plausibly alleged that the recordkeeping fees were excessive 

relative to the recordkeeping services rendered—the primary issue the Majority 

highlights here—the court did not rely on these other considerations.

Second, we’re at the pleadings stage. We must construe the complaint 

“liberally, accepting all factual allegations therein as true and drawing all 

reasonable inferences in the plaintiff’s favor.” Sacerdote v. New York University, 9 

F.4th 95, 106–07 (2d Cir. 2021) (citation omitted). Though we have acknowledged 

that particular care is required to ensure that a complaint alleges “nonconclusory

factual content raising a plausible inference of misconduct,” we have also 

recognized that “ERISA plaintiffs generally lack the inside information necessary 

to make out their claims in detail unless and until discovery commences.” Id. at 

107 (emphasis in original) (quoting Pension Ben. Guar. Corp. ex rel. St. Vincent 

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Catholic Medical Centers Retirement Plan v. Morgan Stanley Investment Management

Inc., 712 F.3d 705, 718 (2d Cir. 2013)). And we have acknowledged that, “as is 

true in many contexts, a claim under ERISA may withstand a motion to dismiss 

based on sufficient circumstantial factual allegations to support the claim, even if 

it lacks direct allegations of misconduct.” Id. (citation omitted). In short, there is 

not a heightened pleading standard for these kinds of ERISA claims. Id. at 108 

n.47 (noting that ERISA complaints are not subject to a heightened pleading 

standard, and that an ERISA plaintiff need not rule out lawful explanations for 

the defendant’s conduct). 

Moreover, even if, as noted below, some contexts call for particular caution

in evaluating claims for breach of the duty of prudence under ERISA, the 

sensitivities underlying that guidance carry relatively little weight in the context 

of this challenge to recordkeeping costs. Bear in mind, we have repeatedly 

emphasized that whether allegations establish a plausible rather than merely 

possible claim of breach of the duty of prudence is context specific. Sacerdote, 9 

F.4th at 108–09 (“[T]he assessment of any particular complaint is a ‘contextspecific task.’”) (citation omitted); Pension Ben. Guar. Corp., 712 F.3d at 718 

(“‘Determining whether a complaint states a plausible claim for relief is a 

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context-specific task that requires the reviewing court to draw on its judicial 

experience and common sense.’” (alterations accepted)) (quoting Iqbal, 550 U.S. at

679 (2009)). 

So, for example, in assessing whether a pension fiduciary breached the 

duty of prudence by over-investing in high-risk investments including nonagency mortgage securities—a decision that proved ill-fated in the wake of the 

financial crisis that unfolded in 2008—we explained that the nature of the 

plaintiffs’ allegations called for “particular care” in order to ensure that the 

complaint alleged nonconclusory facts raising a plausible inference of misconduct 

“and does not rely on ‘the vantage point of hindsight.’” Pension Ben. Guar. Corp., 

712 F.3d at 718 (emphasis in original) (citation omitted). 

The Plaintiffs here do not challenge the Plan fiduciaries’ investment 

decisions or portfolio allocations—forward-looking decisions that require

sometimes complex predictions about the future that can appear particularly 

unwise in the harsh light of hindsight. The decisions here involve recordkeeping 

fees—fees for managing the administrative side of the Plan. As set forth above, 

the services required are specified and predictable. So are the recordkeeping 

fees, which are a matter of contract. The only X factor is the portion of fees that 

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are paid through revenue sharing—that is, drawn from revenues from Plan 

investments. The actual cost of those fees cannot be predicted, though they can 

be significantly managed through advance negotiation. This is nothing like the 

complex forward looking investment decisions that may require “particular 

care” within the established motion-to-dismiss framework. Id. 

Finally, as noted above, ERISA is a remedial statute. Allen, 895 F.3d at 223 

(“Congress intended that ERISA function as a comprehensive remedial statute.”)

(internal quotation marks and citation omitted). We thus construe its terms 

liberally to effectuate its remedial purpose. Id. See also Roberts v. Genting New 

York LLC, 68 F.4th 81, 89 (2d Cir. 2023) (“Because it is a remedial statute, we 

construe the WARN Act’s terms liberally.”) (citation omitted); N.C. Freed Co., Inc. 

v. Board of Governors of the Federal Reserve System, 473 F.2d 1210, 1214 (2d Cir. 

1973) (“Since the [Consumer Credit Protection Act] is remedial in nature, its 

terms must be construed in liberal fashion if the underlying Congressional 

purpose is to be effectuated.”) (citing Peyton v. Rowe, 391 U.S. 54, 64–65 (1968); 

Tcherepnin v. Knight, 389 U.S. 332, 336 (1967)). That makes sense. Congress 

enacted ERISA in part to protect the hard won earnings of ordinary people who 

have limited control over important decisions regarding what is for many their 

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most important asset. Courts should be loath to interpose undue obstacles in the 

path of plaintiffs seeking to protect their ERISA rights. See also Pension Ben. Guar. 

Corp., 712 F.3d at 728 (Straub, J., dissenting in part) (noting concern that 

“heightened pleading requirements threaten to obstruct ERISA’s remedial goals” 

because Congress intended ERISA’s standards to be “enforced in part by private 

litigation”) (citations omitted). 

Plaintiffs here and in like cases have a tough row to hoe. In a world where 

recordkeeping fees are sometimes collected through a combination of direct 

charges and indirect revenue sharing, it’s not at all clear whether and how they 

will be able to determine the total recordkeeping costs paid by comparator plans

in order to plausibly state a circumstantial claim for breach of the duty of 

prudence based on comparisons to other plans. But in a world where the bundle 

of recordkeeping services available to a particular class of plans is predictable, 

and the range of services chosen by a plan has minimal impact on its actual

recordkeeping costs—per Plaintiffs’ allegations, the world we live in—the failure 

to itemize the specific services provided to the subject plan and each comparator 

does not defeat a circumstantial evidence-based claim of breach of the duty of 

prudence.

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For these reasons, I concur in part and concur in the judgment. 

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