United States Court of Appeals

For the Eighth Circuit 

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No. 21-2749

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Daniel C. Matousek, individually and on behalf of all others similarly situated; 

Teresa J. Cantu, individually and on behalf of all others similarly situated; Leah M. 

Maloney, individually and on behalf of all others similarly situated

 Plaintiffs - Appellants

v.

MidAmerican Energy Company; The Board of Directors of MidAmerican Energy 

Company; MidAmerican Energy Company Pension and Employee Benefits Plans 

Administrative Committee; John Does, 1-30

 Defendants - Appellees

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Appeal from United States District Court 

for the Southern District of Iowa - Central 

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Submitted: April 13, 2022

Filed: October 12, 2022

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Before SHEPHERD, ERICKSON, and STRAS, Circuit Judges. 

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STRAS, Circuit Judge.

Like many companies, MidAmerican offers a retirement plan to its 

employees. Some thought it saddled them with unreasonably high costs and low-
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quality investments. In their complaint, however, they failed to identify better 

alternatives, so we affirm the district court’s1 decision to dismiss. 

I. 

Company-sponsored retirement plans follow one of two models. The first is

a defined-benefit plan, which provides retirees with “a fixed payment” regardless of 

performance. Thole v. U.S. Bank N.A., 140 S. Ct. 1615, 1618 (2020). In this type 

of plan, the employer is generally on the hook if plan assets fall short. Id. at 1620–

21. From the viewpoint of participants, the main advantage of a defined-benefit plan 

is the certainty of receiving a fixed stream of payments at retirement.

MidAmerican selected the other type, a defined-contribution plan, which can 

rise in value over time but includes no fixed payments. The amount available at 

retirement depends on the choices that participants make: when and how much to 

contribute, what investments to select, and when to start withdrawing money. See 

Spano v. Boeing Co., 633 F.3d 574, 576, 585 (7th Cir. 2011); see also Hughes v. Nw. 

Univ., 142 S. Ct. 737, 740 (2022) (explaining that the funding comes from “pretax 

contributions” from employees and “matching contributions” from employers). It 

can also depend on how well the plan managers carry out their fiduciary duties, 

including their diligence in keeping costs low and their skill in selecting “which 

investments” belong “in the plan’s menu of options.” Hughes, 142 S. Ct. at 742. 

According to Daniel Matousek and the other plaintiffs, MidAmerican’s plan 

did neither well. First, the plan’s investment committee let recordkeeping expenses 

spiral out of control. Davis v. Washington Univ. in St. Louis, 960 F.3d 478, 482 (8th 

Cir. 2020) (defining these expenses as paying for “the day-to-day operations of the 

plan itself”). According to the complaint, a larger plan like this one should have 

lower fees. 

1

The Honorable Charles R. Wolle, United States District Judge for the 

Southern District of Iowa, now retired. 
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Second, the investment committee allegedly failed to “monitor all plan 

investments and remove [the] imprudent ones.” Hughes, 142 S. Ct. at 740. Some

consistently underperformed. Others cost too much. Either way, keeping these 

investments showed that the investment committee (and the directors who appointed 

them) must have been “asleep at the wheel.” Davis, 960 F.3d at 483. 

The district court granted MidAmerican’s motion to dismiss. Without 

mentioning the recordkeeping allegations, it concluded that Matousek and the other 

plaintiffs had failed to plead meaningful benchmarks for “assessing the performance 

of the challenged funds.” 

II. 

We review the dismissal de novo, “accepting as true the allegations . . . in the 

complaint and drawing all reasonable inferences in favor of the nonmoving party.” 

Id. at 482 (quotation marks omitted). A complaint can only survive a motion to 

dismiss if it contains “‘sufficient factual matter’ to state a facially plausible claim 

for relief.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 

The allegation here is that the plan’s fiduciaries have violated their duty of 

prudence, which is about how they must act. See Braden v. Wal-Mart Stores, Inc., 

588 F.3d 585, 595 (8th Cir. 2009). If they failed to use the same “care, skill, 

prudence, and diligence under the circumstances” as “a prudent man,” then they have 

breached their duty. 29 U.S.C. § 1104(a)(1)(B). The process is what ultimately 

matters, not the results. See id. 

A plaintiff typically clears the pleading bar by alleging enough facts to 

“infer . . . that the process was flawed.” Davis, 960 F.3d at 482–83 (quotation marks 

omitted). The key to nudging an inference of imprudence from possible to plausible 

is providing “a sound basis for comparison—a meaningful benchmark”—not just 

alleging that “costs are too high, or returns are too low.” Id. at 484.
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III. 

To manage the “day-to-day operations” of the plan, MidAmerican hired 

Merrill Lynch, which served as the plan’s recordkeeper. Id. at 482. It was tasked

with “track[ing] the balances of individual accounts, provid[ing] regular account 

statements,” offering various other services, and making sure the plan was 

complying with regulatory requirements. Hughes, 142 S. Ct. at 740. In return, 

Merrill Lynch received $1.9 million to $3.1 million in fees per year, which translates 

to between $326 and $526 per plan participant.

The claim here is that these amounts were too high. In the absence of 

“significant allegations of wrongdoing,” Tussey v. ABB, Inc., 746 F.3d 327, 336 (8th 

Cir. 2014), the way to plausibly plead a claim of this type is to identify similar plans 

offering the same services for less. See Albert v. Oshkosh Corp., 47 F.4th 570, 579–

80 (7th Cir. 2022); see also Sweda v. Univ. of Pa., 923 F.3d 320, 330 (3d Cir. 2019) 

(holding that the plaintiffs plausibly alleged a breach-of-fiduciary-duty claim when

the plan spent millions more than “similar plans” paid “for the same services”). 

A.

The plaintiffs allege that no more than $100 per participant is reasonable for 

a plan with approximately $1 billion in total assets and 5,000 participants. Even if 

the fees here look high, we cannot infer imprudence unless similarly sized plans 

spend less on the same services. Albert, 47 F.4th at 579–80. 

First, however, we need to determine what those services are. Two documents 

fill in the details. One is a participant-disclosure form, which describes the services 

offered by the plan and the costs accompanying them. The other is an “Annual 

Return/Report of Employee Benefit Plan”—otherwise known as a Form 5500—

which discloses the aggregate payments made to the plan’s recordkeeper. See Davis, 

960 F.3d at 484 n.3 (explaining that these documents are “embraced by the 

pleadings” and can be considered by the district court on a motion to dismiss).
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According to the participant-disclosure forms, the cost of Merrill Lynch’s

“suite of administrative services” ranges between $32 and $48 per participant. In 

return, Merrill Lynch safeguards “assets provided by outside service providers,” 

keeps “track of participant accounts and transactions,” and provides “call centers, 

websites, account statements[,] and educational materials.” These are, in the words 

of the complaint, “the suite of administrative services typically provided . . . by [a] 

plan’s ‘recordkeeper.’”

So what about those larger numbers in the complaint? A portion are indirect 

“revenue-sharing payments,” which account for no more than $37 per participant 

per year. The remainder appears to come from what Merrill Lynch received from 

its other, non-recordkeeping services: investment advice for those with self-directed 

brokerage accounts; commissions for individual trades; and trading, loanorigination, returned-payment, and check-service fees. Each is “charged against the 

account of [individual] participant[s] . . . rather than on a [p]lan-wide basis.” 

The Form 5500s, which describe Merrill Lynch’s “total compensation” for 

“services rendered to the plan,” seem to bear this out. (Emphasis added). According 

to the form’s “service codes,” Merrill Lynch’s compensation includes investmentmanagement fees, redemption fees, shareholder-servicing fees, and securitiesbrokerage commissions. In plain English, the per-participant fees cover more than 

just standard recordkeeping services. 

For a benchmark to be “sound” and “meaningful” here, it must do the same. 

Meiners v. Wells Fargo & Co., 898 F.3d 820, 822 (8th Cir. 2018). After all, we have 

been clear that the key to stating a plausible excessive-fees claim is to make a likefor-like comparison. See Davis, 960 F.3d at 485. 

B. 

Rather than point to the fees paid by other specific, comparably sized plans, 

the plaintiffs rely on industry-wide averages. But the averages are not all-inclusive: 
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they measure the cost of the typical “suite of administrative services,” not anything 

more. And using this information creates a mismatch between Merrill Lynch’s total 

compensation, which includes everything it does for MidAmerican’s plan, and the 

industry-wide averages that reflect only basic recordkeeping services. 

The first source, published by a consulting group called NEPC, says that no 

similarly sized retirement plan paid more than $100 per participant for 

recordkeeping, trust, and custodial services. MidAmerican’s plan compares

favorably, with the fees for these basic recordkeeping services totaling between $32 

and $48 per plan participant. NEPC’s report says nothing about the fees for the other 

services that Merrill Lynch provided, which means it cannot provide a “sound basis 

for comparison” for anything else. Meiners, 898 F.3d at 822; see Smith v. 

CommonSpirit Health, 37 F.4th 1160, 1169 (6th Cir. 2022) (rejecting a comparison 

to industry averages because the plaintiff “ha[d] not pleaded that the services that 

[the plan’s] fee covers are equivalent to those provided by the plans comprising the 

average in the industry publication that she cite[d]”). 

The second source, the 401K Averages Book, is similarly unhelpful. It 

suggests that the average plan with 2,000 participants and $200 million in assets paid 

$160 per participant in revenue-sharing and $5 in recordkeeping-administration fees. 

Neither includes fees arising out of participant-initiated transactions like “loans” and 

“distributions.” And the revenue-sharing category consists of fees “received by 

other service providers to the plan,” including “recordkeepers, advisors[,] and

platform providers.” 

It is almost impossible to tell if these figures provide a meaningful benchmark. 

See Davis, 960 F.3d at 484–85. For one thing, they leave out the total fees charged 

for individualized services like “loans” and “distributions,” just like the NEPC 

Report, making them a less-than-helpful benchmark for the larger, totalcompensation numbers in the complaint. For another, they analyze smaller plans: 

those with less than half the number of participants and under a quarter of the total 
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assets. See Smith, 37 F.4th at 1169 (discounting comparisons to smaller plans that 

“might offer fewer services and tools to plan participants”). 

The point is that neither of these sources tells us much about whether 

MidAmerican pays too much to Merrill Lynch overall. And without a meaningful

benchmark, the plaintiffs have not created a plausible inference that the decisionmaking process itself was flawed. See Davis, 960 F.3d at 484–85; Sweda, 923 F.3d 

at 330–32. 

IV. 

The plaintiffs tread on familiar ground with their investment-by-investment 

duty-of-prudence claims. See, e.g., Davis, 960 F.3d at 484; Meiners, 898 F.3d at 

823–24. As the Supreme Court recently explained, fiduciaries like MidAmerican’s 

investment committee “normally ha[ve] a continuing duty of some kind to monitor 

investments and remove imprudent ones.” Hughes, 142 S. Ct. at 741. The complaint 

alleges that the committee should have removed five investments from

MidAmerican’s lineup, each of which was a poor performer, cost too much, or both.

Beyond these bare allegations, there still must be a “sound basis for 

comparison—a meaningful benchmark.” Meiners, 898 F.3d at 822. In one case, a 

combination of a “market index and other shares of the same fund” did the trick, but 

there is no one-size-fits-all approach. Id. (emphasis added) (discussing Braden, 588 

F.3d at 595–96). Nudging the complaint past the plausibility threshold depends on 

the “totality of the specific allegations.” Id. (citation omitted). 

The plaintiffs’ approach in this case is multifaceted. The complaint starts by 

comparing the performance of three of the five funds to their “peer groups.” Then 

it evaluates the expense ratios of all but one fund to the mean and median expense 

ratios in their groups. And finally, it analyzes the expenses and performance of two 

of the funds against alternative investments. None clears the pleading bar. 
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A.

Start with the peer-group performance comparisons for three of the funds in 

MidAmerican’s lineup: Oakmark Equity and Income Investor, Dodge & Cox 

International Stock, and Aristotle Small Cap Equity I. The peer group for each 

contains hundreds of funds. The allegation is that these funds performed worse than 

their peer-group averages over one-, three-, five-, and ten-year periods. 

On its own, the raw performance data provided by the plaintiffs falls short of 

providing a “meaningful benchmark.” Davis, 960 F.3d at 484. The main reason is 

that the composition of the peer groups remains a mystery. The complaint says that 

Oakmark Equity and Income Investor is in the “Non-target date Balanced” category

and that Dodge & Cox International Stock is in the “International Equity” category. 

But there is no explanation of what types of funds are in each group, much less the

criteria used to sort them. And for Aristotle Small Cap Equity I, the complaint does 

not even identify a peer group. 

With so little information, we have no way of knowing whether the peer-group 

funds provide a “sound basis for comparison.” Meiners, 898 F.3d at 822. Among 

the missing details is whether they hold similar securities, have similar investment 

strategies, and reflect a similar risk profile. If they are indeed different, then the 

peer-group data is unlikely to be “sound” or “meaningful” on its own. Id. 

Compare the information in the complaint to what worked in Braden. There, 

the plaintiffs relied on “the market index and other shares of the same fund.” Id. at

822 (emphasis added) (citing Braden, 588 F.3d at 595–96). The reason why those 

two comparisons turned out to be “meaningful” was that tracking the market index 

was the stated investment goal of the fund the plaintiffs challenged. See Braden, 

588 F.3d at 595–96 (noting that the funds had “underperformed the market indices 

they were designed to track”). Here, by contrast, we have limited information about
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each of the challenged funds,

2 and know even less about the funds in each peer 

group. 

B. 

To be fair, the complaint provides mean and median expense-ratio data for 

two of these funds—Oakmark Equity and Income Investor and Dodge & Cox 

International Fund—and for two others. Once again relying on peer-group data, the 

plaintiffs allege that the expense ratios of these four funds eclipse both the mean and 

median expense ratios for their respective peer groups.

3

The problem here echoes what we have already said about the raw 

performance data. There is no way to compare the large universe of funds—about 

which we know little—to the risk profiles, return objectives, and management 

approaches of the funds in MidAmerican’s lineup. The bottom line is that the 

aggregate data fails “to connect the dots in a way that creates an inference of 

imprudence.” Davis, 960 F.3d at 486. 

C. 

In one final attempt to clear the pleading bar, the plaintiffs offer individualized

benchmarks for two investments: Dodge & Cox International Stock and Oakmark 

Equity and Income Investor. In their view, finding less-expensive and superiorperforming investments should be enough to nudge their claim from “conceivable 

to plausible.” Iqbal, 556 U.S. at 682–83. 

2

For Aristotle Small Cap Equity I, for example, there is nothing in the 

complaint about fees. In Braden, by contrast, the plaintiffs provided expense ratios 

and compared them with “other shares of the same fund” to plausibly plead that they 

were too high. See Meiners, 898 F.3d at 822 (citing Braden, 588 F.3d at 595–96). 

3

For the other two funds that allegedly have excessive fees, the complaint 

places Dodge & Cox Stock in the “Domestic Equity” category and PIMCO Total 

Return Instl Revenue Share in the “Domestic Bond” category.
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For Dodge & Cox International Stock, the complaint points us to Vanguard 

International Growth Fund. The former, according to its prospectus, has a value

strategy: it typically invests in “well-established . . . companies that, in Dodge & 

Cox’s opinion, appear to be temporarily undervalued by the stock market but have a 

favorable outlook for long-term growth.” The latter, by contrast, has a growth

strategy: it “invests mainly in common stocks of non-U.S. companies that are 

considered to have above-average potential for growth.” Just from their contrasting

investment styles, the two have “different aims, different risks, and different 

potential rewards that cater to different investors.” Davis, 960 F.3d at 485. 

We reach the same conclusion about the American Balanced R6 Fund, which 

the complaint insists is a benchmark for Oakmark Equity and Income Investor. The 

American fund “uses a balanced approach to invest in a broad range of securities,” 

including both growth and value stocks. The Oakmark fund, by contrast, “uses a 

value investment philosophy” by buying stock in a “relatively small number” of 

companies trading below their intrinsic value. These two funds, much like the other 

two, are “just different.” Davis, 960 F.3d at 486. So using either as a benchmark 

for the other would neither be “sound” nor “meaningful.” Id. at 484. 

 

V.

One loose end remains. The district court dismissed the complaint with 

prejudice without giving the plaintiffs a chance to amend it. We conclude that there 

was no abuse of discretion. Far E. Aluminium Works Co. v. Viracon, Inc., 27 F.4th 

1361, 1367 (8th Cir. 2022).

Although litigants are “freely give[n] leave” to amend, see Fed. R. Civ. P. 

15(a)(2), they still have to “follow [the] proper procedures,” Thomas v. United 

Steelworkers Loc. 1938, 743 F.3d 1134, 1140 (8th Cir. 2014). And here, the 

plaintiffs never requested leave to amend, much less “submitted an amended 

complaint.” Far E. Aluminium Works, 27 F.4th at 1367; see N.D. & S.D. Iowa R. 

15 (“A party moving to amend . . . a pleading . . . must electronically attach to the 
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motion . . . the proposed amended . . . pleading.”). A failure to do either is reason 

enough to reject their argument now. See In re 2007 Novastar Fin. Inc., Sec. Litig., 

579 F.3d 878, 884–85 (8th Cir. 2009); see also United States v. Mask of Ka-NeferNefer, 752 F.3d 737, 742 (8th Cir. 2014) (explaining that district courts are under no 

obligation “to invite a motion for leave to amend if the plaintiff [does] not file one”). 

VI. 

We accordingly affirm the judgment of the district court.

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