### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 18-2569
L AURA L. D IVANE, et al. , Plaintiffs-Appellants ,

v.

N ORTHWESTERN U NIVERSITY, et al. , Defendants-Appellees

.

____________________ Appeal from the United States District Court for the Northern District of Il linois, Eastern Division.

No. 1:16-cv-08157 — Jorge L. Alonso
, Judge

.

____________________
A RGUED M AY 23, 2019

— D ECIDED M ARCH 25, 2020

____________________

Before B AUER , M ANION, and B RENNAN, Circuit Judges

. B RENNAN, Circuit Judge . Laura Divane and other plainti ff s, 1 bene fi ciaries of employee investment plans, sued Northwestern University for allegedly breaching its fi duciary duties under the Employee Retireme nt Income Security Act, 29

1 April Hughes, Susan Bona, Katherin e, Lancaster, and Jasmine Walker.2 No. 18-2569

U.S.C. § 1001, et seq. The district court found no breach. Neither do we, so we a ffi rm. I
There are two ERISA de fi ned-contribution plans at issue in this case: the Northwestern University Retirement Plan and the Northwestern University Vo luntary Savings Plan. Under the Retirement Plan, participating Northwestern University employees can contribute a portion of their salary to their account and Northwestern makes a matching contribution. Employees participating in the Voluntary Savings Plan also contribute a portion of their salary, but Northwestern doesnot make a matching contribution. Both plans allow participants to choose the investments into which the money in their account is invested and to ch oose among the investment options assembled by the plans’ fi duciaries. Each plainti ffparticipates in one or both plans. Northwestern is the administrator and designated fi duciary of both plans. It assigned some of its fi duciary administrative duties to university o ffi cials 2 and established a Retirement Investment Commi tt ee comprised of individual university o ffi cers 3 who exercised discretionary authority in managing the plans’ assets. All are named defendants in this suit, and we collectively refer to them as “Northwestern” or “defendants.”

2 These officials include the university’s executive vice president,Nimalam Chinniah, and former executive vice president, Eugene Sunshine.

3 The Committee members are Ronald Braeutigam, Kathleen Hagerty, Craig Johnson, Candy Lee, William McLean, Ingrid Stafford, and Pamela Beemer.No. 18-2569 3

Displeased with the administ ration of the plans, plainti ff s sued Northwestern for allegedly breaching its fi duciary duties under ERISA. Plainti ff s’ amended complaint 4 is massive: 287 paragraphs over 141 pages. Most of plainti ff s’ allegations, though, are not speci fi c to certain defendants or to the plans here. For example, plainti ff s object to a wide range or mix of investment options, noting that approach can overwhelm an unsophisticated investor. They believe too many choices leaves the average investor with the “virtually impossible burden” of deciding where to place their money. Before October 2016, the plans o ffered investments through the Teachers Insurance and Annuity Association of America and College Retirement Equities Fund (TIAA-CREF) as well as Fidelity ManagementTrust Company. The Retirement Plan o ffered 242 investment options, and the Voluntary Savings Plan o ff ered 187 options. Among the available options were mutual funds and insurance company annuities. 5

4 Plaintiffs filed their initial complaint on August 17, 2016, alleging two counts for breach of the defendants’ duties of loyalty and prudence due to unreasonable administrative and management fees and performancelosses, and one count for failure to monitor designated fiduciaries. Plaintiffs filed an amended complaint on December 15, 2016, adding three additional counts for prohibited transactions based on the same alleged breach conduct. In both complaints, plaintiffs requested a jury trial.

5 These options represent a variety of investment offerings ranging from conservative to more aggressive. Th e annuity options offered here included fixed annuities, which provide participants with the assurance that they will have a stable income in retirement, and variable annuities, which carry some additional risk for the inve stor but allow for the possibility of a greater return.4 No. 18-2569

In the four months leading up to October, these optionswere narrowed into four tiered categories from which participants could select their preferred investments:

 Tier 1 : Target-date mutual funds that automaticallyrebalance their portfolios to become more conservative as the funds reach their target dates;

 Tier 2 : Five index funds with a pre-selected set of stocks that eliminate trad ing and selection costs;

 Tier 3 : 26 actively managed funds in which a manager or management team selects stocks;

 Tier 4 : A full-service, self-directed brokerage window through which the participant invests his or her plan assets. By October, Northwestern had streamlined its investment

o ff erings to about 40 options to enable “simpler decisionmaking by participants, reduce administrative expenses, increase participant returns, and provide access to lower cost shares when available.” Appellant Br. at 9. Plainti ff s argue Northwestern’s conduct in adjusting its o fferings should be treated as proof that its pre-2016 o fferings were imprudent.
One of the TIAA-CREF investme nts that remained available to plan participants post-2016 was the TIAA-CREF Traditional Annuity, a fi xed annuity contract that returns a guaranteed, contractually speci fi ed minimum interest rate.The Traditional Annuity has “severe restrictions and penalties for withdrawal,” includin g a 2.5% surrender charge if a participant withdraws the invest ment in a lump sum sooner than 120 days after the termin ation of her employment. TIAA policy dictates that if the Traditional Annuity is o ffered as part of an investment plan, that plan must also o ffer the TIAA-No. 18-2569 5

CREF Stock Account fund and use TIAA as the recordkeeper for all TIAA o ff erings. Plainti ff s complain that the Stock Account charges excessive fees and has not historically performed well. Among the fees included ina fund’s expense ratio are costs for recordkeeping. De fi ned contribution plans requirerecordkeepers to track the amount of each participant’s account and how the account is allocated among investment options. Recordkeepers also maintain websites for participantsand sometimes provide investment advice or education materials. One way that plans (including those in this case) pay for recordkeeping is to have the fund that collects the expense ratio share part of the expense ratio with the recordkeeper.
Plainti ff s alleged Northwestern should have paid recordkeeping costs by assessing a fl at annual fee based on the number of participants in each plan. Speci fi cally, plainti ff s alleged that some of the plan funds charged retail-rate expense ratios to cover recordkeeping rather th an institutional-rate expense ratios. According to plainti ff s, a reasonable rate for recordkeeping fees would have been$35 per participant per year. The amended complaint re fl ects that plan participants paid an average of $54 to $87 per year for the Voluntary Savings Plan and an average of $153 to $213 per year for the Retirement Plan. 6 Plainti ff s argued these expenses are even higher for plans that use multiple recordkeepers, as was the case here.

6 Plaintiffs allege that in 2015, the Voluntary Savings Plan held $530 million and had 12,293 participants while the Retirement Plan held $2.34 billion and had 21,622 participants.6 No. 18-2569

Six days before discovery was scheduled to close, plainti ff s sought leave to fi le a second amended complaint alleging four new counts for breach of fi duciary duty. Aside from the four new counts, the second amended complaint mirrored the causes of action and claims in the amended complaint. The four new counts alleged that Northwestern: (1) o ff ered retail class funds as investment opti ons instead of using their bargaining power to o ff er institutional class shares at lowerprices; (2) violated Northwestern’s Investment Policy Statement by failing to monitor investment performance and recordkeeping costs; and (3) allowed TIAA to access and use participant information to market its services to participants (two separate counts). These additional counts were based on information available to plainti ff s before discovery.
Plainti ff s sought monetary and injunctive relief and requested a jury trial and leave to fi le their proposed second amended complaint. Defendants moved to dismiss the amended complaint on every count, to deny leave to fi le the second amended complaint, and to strike plainti ff s’ request for a jury trial.
II The district court granted defendants’ motion to strike the jury demand, fi nding that the monetary relief sought by plainti ff s did not constitute damages but rather a form of equitable restitution that did not entitle plainti ff s to a jury trial. The court also denied plainti ff s’ request for leave to fi le a second amended complaint and granted defendants’ motion to dismiss the amended complaint on all counts. In dismissing the amended comp laint, the district court rejected plainti ff s’ theory that Northwestern breached itsNo. 18-2569 7

fi duciary duty by o ffering the Stock Account and allowing TIAA to serve as the recordkeeper for TIAA funds. First, asthe court observed, “no plan participant was required to invest in the CREF Stock fund or any other TIAA-CREF product,” so “any plan participant could avoid what plainti ff s consider to be the problems with these products ... simply by choosing other options.” Divane v. Northwestern Univ. , 2018 WL 2388118, at *6 (N.D. Ill. May 25, 2018). Moreover, “[t]he plans ... had valid reasons to use TIAA-CREF as record keeper for its products.” Id. According to plainti ff s’ own allegations: “TIAA-CREF requiredthe plans to use it as record keeper for its products and to o ff er [the] CREF Stock Account if the plans were going to o ff er the TIAA-CREF Traditional Annuity,” a popular investing option. Id. The court concluded that “[i]t was prudent to k eep the [TIAA-CREF] Stock Account as an option (which no one was required to choose) and to keep TIAA-CREF as record k eeper for its own funds (which no one was required to choose) when the alternative was to subject some participants to [the] 2.5% surrender charge” imposed by the Traditional Annuity. Id. Next, the district court rejected plainti ff s’ claim that Northwestern breached its fi duciary duties by permi tt ing excessive fees. Applying Hecker v. Deere & Co. , 556 F.3d 575 (7th Cir. 2009), the court held “there is nothing wrong, for ERISA purposes, with the fact that the plan participants paid the record-keeper expenses via ... expense ratios.” Id. at *8 (citing Hecker, 556 F.3d at 585 (holding the use of revenue-sharing for plan expenses did not amount to an ERISA violation)). Nor was Northwestern required to try to “ fi nd a record-keeper willing to take $35/participant/year,” the rate that plainti ff s alleged was reasonable. Divane, 2018 WL 2388118 at *8. If plan8 No. 18-2569

participants sought to keep expense ratios low, they had many investment options to do so. In applying Loomis v. Exelon Corp. , 658 F.3d 667 (7th Cir. 2011), the district court also rejected plainti ff s’ claim that Northwestern breached its fi duciary duty because “the range of investment options was too broad.” Id. at *8–9 (citing Loomis , 658 F.3d at 673–74 (holding that plans did not violate ERISA by o ff ering additional funds participants did not want to choose)). The court explained that the “[p]lainti ff s might have a di ff erent case if they alleged that the fi duciaries failed to make [the low-cost index funds preferred by plainti ff s] available to them.” Id. at *8. But plainti ff s’ allegations describe the freedom they had under the plans to invest in the fund options they wanted. Id. at *8–9 (plainti ff s “allege[d] that those types of low-cost index funds were and areavailable to them,” showing that “the plans o ffered them the very types of funds they want[ed].”). The court concluded “these allegations [cannot] add up to a breach of fi duciary duty.” Id. at *8. The court further dismissed plainti ff s’ claims that “the things [plainti ff s] allege to be breaches of fi duciary duty ... also constitute transact ions prohibited by ERISA.” Id. at *9. These claims rest on the “[p]lainti ff s’ theory [that Northwestern] engaged in a prohibited transaction every time the plans paid fees to TIAA-CREF or Fidelity” for the same recordkeeping conduct alleged in the fi duciary duty claims. Id. The court found “plainti ff s’ a tt empt to hang their prohibited transaction theoryon § 1106(a)(1)(D)” ine ffective. 7 Id.

729 U.S.C. § 1106(a)(1)(D) prohibits the plan fiduciary from engaging in a transaction that he knows or should know would constitute a direct orNo. 18-2569 9

Once collected as an expense rat io by a TIAA-CREF fund or a Fidelity fund, the amount of the recordkeeping fees “became the property of the respective mutual fund,” and “[t]hus, the transfer of some of it for re cordkeeping costs was not a transfer of plan assets.” Id. (citing Hecker, 556 F.3d at 584 (rejecting argument that revenue sharing constituted a transfer of plan assets “[o]nce the fees are co llected from the mutual fund’s assets and transferred to [the re cordkeeper], they become [the recordkeeper’s] assets—again, no t assets of the Plans”)). The court concluded “that plainti ff s have plead the ingredients of [an a ffi rmative] defense” by providing evidence “that the fees paid were reasonable, as a ma tt er of law.” Id. at *10 (quoting United States Gypsum v. Indiana Gas Co. , 350 F.3d 623, 626 (7th Cir. 2003) (only appropriate time to dismiss a claim based on

an a ffi rmative defense is when plainti ff“plead[s] [himself] out of court by alleging (and thus admi tt ing) the ingredients of a defense.”)). 8 In denying plainti ff s’ motion for leave to fi le a secondamended complaint, the district court found the proposed new counts were untimely, fut ile, and abandoned. “[A]fter more than a year of discovery,” id. at *11, and within just six days of the close of discovery, plainti ff s sought to add four new counts. The court separately analyzed each. On proposed Count VII, alleging Northwestern should have o ffered investment options at below-retail prices, the court found “that many of the facts underlying this count were alleged in

indirect “transfer to, or use by or for the benefit of a party in interest, of any assets of the plan.”

8 The court also considered plaintif fs’ failure-to-monitor claim and dismissed it as abandoned. Id. at *11.10 No. 18-2569

plainti ff s’ amended complaint, such that plainti ff s could and should have added this count sooner.” Id. The court alsofound the count futile for failing to state a claim and abandoned because plainti ff s did not respond to defendants’ arguments. With respect to proposed Count VIII, alleging that the Retirement Investment Commi tt ee violated its investment policy statement, the court found the claim to be both futile and untimely because plainti ff s had knowledge of the relevant allegations for at least eight months and “[w]aiting until the fi nal few days of a discovery pe riod that had lasted more than a year was undue.” Id. at *13–14. Regarding proposed Counts IX and X, alleging No rthwestern improperly allowed TIAA to access and use participant data, the court held that both claims were futile because it was “in no way imprudent” to allow TIAA access to particip ants’ information as necessary “to serve as a record keeper.” Id. at *12. The court noted plainti ff s’ failure to “cite[] a single case in which a court has held that releasing con fi dential information or allowing someone
to use con fi dential information constitutes a breach of fi duciary duty under ERISA” or “that such information is a plan asset” in a prohibited transaction. Id. Finally, in granting defendants ’ motion to strike the jury demand, the district court acknowledged ERISA’s historical roots in trust law, which provides equitable, but not legal, remedies. Divane v. Northwestern Univ. , 2018 WL 1942649 at *1 (N.D. Ill. April 25, 2018) (citing Tibble v. Edison Int’l , 135 S.Ct. 1823, 1828 (2015) (noting that ERISA fi duciary law is derived from trust law)). In consider ing ERISA’s “statutory antecedents,” this court has concluded that plainti ff s have no right to a jury trial in ERISA cases. See Pa tt on v. MFS/Sun Life Fin.No. 18-2569 11

Distrib., Inc. , 480 F.3d 478, 484 (7th Cir. 2007); McDougall v. Pioneer Ranch Ltd. P’ship , 494 F.3d 571, 576 (7th Cir. 2007); Mathews v. Sears Pension Plan , 144 F.3d 461, 468 (7th Cir. 1998). Recognizing this court’s preceden t, the district court denied plainti ff s’ request for a jury trial. See Divane, 2018 WL 1942649 at *3.
III On appeal we review whether the district court erred by dismissing plainti ff s’ amended complaint for failing to state a claim for relief under ERISA, denying plainti ff s’ request to fi le a second-amended complaint, and rejecting plainti ff s’ demand for a jury trial. For the reasons below, we fi nd no error.
A
This court reviews dismissals under Federal Rule of Civil Procedure 12(b)(6) de novo and may a ffi rm the district court’s decision on any ground for dismissal contained in the record. Larson v. United Healthcare Ins. Co. , 723 F.3d 905, 910 (7th Cir. 2013); Ewell v. Toney, 853 F.3d 911, 919 (7th Cir. 2017). “We construe the complaint in the light most favorable to plainti ff
,accept all well-pleaded facts as true, and draw reasonable inferences in plainti ff’s favor.” Taha v. Int’l Bhd. of Teamsters, Local 781 , 947 F.3d 464, 469 (7th Cir. 2020). But we “need not accept as true statements of law or unsupported conclusory factual allegations,” Yeftich v. Navistar, Inc. , 722 F.3d 911, 915 (7th Cir. 2013); Ashcroft v. Iqbal , 556 U.S. 662, 680–81 (2009), or “ignore any facts alleged in the complaint that undermine the plainti ff’s claim.” Tricontinental Indus. v. PricewaterhouseCoopers, LLP, 475 F.3d 824, 833 (7th Cir. 2007). A district court may dismiss a claim pursuant to Rule 12(b)(6) if plainti ff fails to “state a claim upon which relief can12 No. 18-2569

be granted.” F ED

. R. C IV

. P. 12(b)(6). A complaint must “give the defendant fair notice of what ... the claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Although a plainti ff need not providedetailed factual allegations, mere conclusions and a “formulaic recitation of the elements of a cause of action” will not

su ffi ce. Id.; see also Iqbal , 556 U.S. at 678–79 (the notice-pleading rule “does not unlock the doors of discovery for a plainti ff armed with nothing more than co nclusions”). Instead, to survive a motion to dismiss, a claim must be plausible. Iqbal , 556 U.S. at 679 ( fi nding the court must be able to infer from the allegations “more than the mere possibility of misconduct”); see also Twombly, 550 U.S. at 570 (allegations must “nudg[e] [plainti ff’s] claims across the line from conceivable to plausible”). When claiming an ER ISA violation, the plainti ffmust plausibly allege action that was objectively unreasonable. See Amgen Inc. v. Harris , 136 S. Ct. 758, 760 (2016) (“[A] prudent fi duciary in the same position could not have concluded that the alternative action would do more harm than good.”) (cleaned up); see also Renfro v. Unisys Corp. , 671 F.3d 314, 322 (3d Cir. 2011) (no “hypothetical prudent fi duciary” would have made the same objective choice).
Plainti ff s have alleged Northwestern breached its fi duciary duty as a prudent investor, and they now seek relief underERISA, 29 U.S.C. §§ 1132(a)(2) and 1109(a). As the plans’ fiduciary, Northwestern is required to “discharge [its] duties with respect to the plan[s] solely in the interest of the participantsand beneficiaries” in a manner that “defray[s] reasonable expenses of administering the plan[s]” and “with the care, skill, prudence, and diligence ... that a prudent man” would use. 29 U.S.C. § 1104(a). In their amended complaint, plainti ff s speci fi cally alleged that Northwestern failed to act as aNo. 18-2569 13

prudent fi duciary when it included the Stock Account as a plan investment o ff ering and allowed TIAA-CREF to serve as a recordkeeper for its funds (Count I); created a multi-entity recordkeeping arrangement (CountIII); and provided investment options that were too numerous, too expensive, and underperforming (Count V). In Co unts II, IV, and VI, plainti ff sclaimed the above conduct also constituted prohibited transactions under ERISA. Id. § 1106.

1
Plainti ff s alleged Northwestern breached its fi duciary duty by “allowing TIAA-CREF to mandate the inclusion of the CREF Stock Account” in th e plans and by allowing TIAA to serve as recordkeeper for its funds. Plainti ff s’ own allegations, though, contradict this claim. As plainti ff s note in their amended complaint, many plan participants invested money in the Traditional Annuity, which was an a tt ractive o ffering because it promised a contractually speci fi ed minimum interest rate. Plainti ff s do not allege it was imprudent for the plans
to o ff er the Traditional Annuity. Instead, plainti ff s object to the plans o ff ering additional TIAA products (including the Stock Account) and to TIAA serving as the recordkeeper for those products. This ignores the bene fi t of using TIAA as a recordkeeper—under that arrange ment, the plans were able
to o ff er participants continued access to the popular Traditional Annuity. Assuming plainti ff s’ allegations are true, they fail to showan ERISA violation. Under the plans, no participant was required to invest in the Stock Account or any other TIAA product. Any participant could avoid what plainti ff s consider to be the problems with those pr oducts (excessive recordkeeping fees and underperformance) simply by choosing from14 No. 18-2569

hundreds of other options within a multi-tiered o ffering system. Participants were not bound to the terms of any TIAA funds simply because they were included in the plans. The allegations instead depict valid reasons for the plans to use TIAA as a recordkeeper and to keep the Stock Account as an option for participants. According to plainti ff s’ own allegations, TIAA required the plans to use it as a recordkeeper for its products and to o ff er participants the Stock Account if the plans o ffered the Traditional Annuity. Given the favorable terms and a tt ractive o ff erings of the Traditional Annuity, which are outlined in plainti ff s’ amended complaint, it was prudent for Northwestern to ac cept conditions that wouldensure the Traditional Annuity remained available to participants. This is especially true considering participants with existing Traditional Annuity fun ds would be subject to a surrender charge of 2.5% if that o ffering was removed. Rather than compare Northweste rn’s actions to those of a “hypothetical prudent fi duciary,” Renfro , 671 F.3d at 322, plainti ff s criticize what may be a rational decision for a business to make (and, indeed, several do) when implementing an employee bene fi ts program. But “[n]othing in ERISA requires employers to establish employee bene fi ts plans. Nor does ERISA mandate what kinds of bene fi ts employers must provide if they choose to have such a plan.” Lockheed Corp. v. Spink , 517 U.S. 882, 887 (1996). That plainti ff s prefer low-cost index funds to the Stock Accoun t does not make its inclusion in the plans a fi duciary breach.
In Loomis , this court acknowledged the di ffi culty with trying to enforce bene fi t program preferences through ERISA. We noted:No. 18-2569 15

Plainti ff’s theory is paternalistic. ... [T]hey wantthe judiciary ... to make [non-preferred] investments impossible. ... [The plan sponsor here]

o ffered participants a menu that includes highexpense, high-risk, and potentially high-return funds, together with low-expense, low-risk, modest-return bond funds. It has left choice to the people who have the most interest in the outcome, and it cannot be faulted for doing this.
Loomis , 658 F.3d at 673–74 (a ffi rming dismissal of claims, noting “the absence from ERISA of any rule that forbids plan sponsors to allow participants to make their own choices”). The same logic applies here and leads us to again conclude that it would be beyond the court’s role to seize ERISA for thepurpose of guaranteeing individual litigants their own preferred investment options.

2
Plainti ff s also alleged Northwestern breached its fi duciaryduties by establishing a multi-entity recordkeeping arrangement that allowed recordkeeping fees to be paid through revenue sharing. On appeal, plainti ff s propose alternative recordkeeping arrangements they would have preferred. For example, plainti ff s argue Northwestern should have implemented a negotiated total fee based on a fl at recordkeeping fee, which could have been “allocated to participants.” App. Br. at 40. But plainti ff s fail to support their claim that a fl at-fee structure is required by ERISA, see Hecker, 556 F.3d at 585 (asset-based fees “violate[] no statute or regulation”), or would even bene fi t plan participants. Indeed, such a structure may have the opposite e ff ect of increasing administrative costs by failing to match the pro-rata fee that individual participants16 No. 18-2569

could achieve at a lower cost th rough exercising their investment options in a revenue-sharing structure. 9 Either way, this court has recognized that although total recordkeeping fees must be known to participants, they need not be individually allocated or based on any speci fi c fee structure. See Hecker, 556 F.3d at 586 ( fi nding so long as partic ipants knew “the total fees for the funds, ... [t]his was enough”). In their amended complaint, plainti ff s alleged that Northwestern should have solicited competitive bids for a fi xed per-capita fee ($35 per year per participant) by a single recordkeeper instead of usin g two separate recordkeepers, TIAA and Fidelity. According to plainti ff s, multiple recordkeeping arrangements impose higher costs on plan participants. Northwestern, though, explained it was prudent to have this arrangement so it could continue o ffering the Traditional Annuity among its o fferings. If Northwestern removed TIAA and hired a third-party recordkeeper, participants would have lost access to the Traditional Annuity and any funds invested in the annuity would have been subject to the 2.5% surrender charge. We disagree with plainti ff s’ theory that Northwestern was required to seek a sole recordkeeper to satisfy its fi duciary duties, fi nding Northwestern’s decision to maintain two recordkeepers prudent. To the extent plainti ff s alleged Northwestern should have selected TIAA as its sole recordkeeper, that assertion also fails

9 SeeAmicus Br. for the U.S. Chamber of Commerce in Supp. of Appellees at 9, ECF No. 42 (describing “revenue sharing” as “a common practice in which service providers of mutual funds share a percentage of the fees they receive with the administrative-service provider of a particularplan ... which can help defray participants’ recordkeeping and other administrative costs”).No. 18-2569 17

to state a claim for relief. Plainti ff s’ amended complaint contains no allegation that plan participants would have been be tt er o ff with TIAA as the sole re cordkeeper. The complaint does not include Fidelity’s recordkeeping costs, and it fails to allege that those costs are the reason for higher fees. Regardless, ERISA does not require a sole recordkeeper or mandate any speci fi c recordkeeping arrangement at all. See Renfro , 671 F.3d at 319 (upholding as prudent plans that used multiple recordkeepers). Plainti ff s’ suggestion (both in their amended complaint and now on appeal) to the contrary is undercut by this court’s decisions in Loomis and Hecker

. In Loomis , this court rejected the argument plainti ff s now advance that a fl at-fee recordkeeping rate is always prudent. See Loomis , 658 F.3d at 672–73 (“A fl at-fee structure might be bene fi cial for participants with the largest balances,” but for participants with smaller balances, it “could work out to more, per dollar under management.”). Again, plainti ff s’ allegations seem to rely on their disapproval of TIAA’s role as recordkeeper rather than any imprudent conduct by Northwestern. But, according to plainti ff s’ own allegations,Northwestern had “valid reasons” for the recordkeeping arrangements they chose, undermining plainti ff s’ imprudent fi

duciary claims. Likewise, in Hecker, a revenue sharing arrangement that paid plan expenses did not co nstitute an ERISA violation. Hecker, 556 F.3d at 585. This court explained: Fidelity Trust ... recovered its costs from the [plan] participants in the same way as it did from outside participan ts—that is, Fidelity Research would assess asset-based fees against the18 No. 18-2569

various mutual funds, and then transfer some of the money it collected to Fidelity Trust. The [plainti ff s’] case depends on the propositionthat there is something wrong, for ERISA purposes, in that arrangement. The district courtfound, to the contrary, that such an arrangement ... violates no statute or regulation. Weagree with the district court. ... [T]he participants were free to direct their dollars to lowercost funds if that was wh at they wished to do.
Hecker, 556 F.3d at 585 (a ffi rming dismissal of claims). There is, then, nothing wrong—for ER ISA purposes—with plan participants paying recordkeeper costs through expense ratios. Northwestern was not required to search for a recordkeeper willing to take $35 per year per participant as plainti ff s would have liked. See id. at 586 (“[N]othing in ERISA requires every fi duciary to scour the market to fi nd and o ffer the cheapest possible fund (which might, of course, be plagued by other problems).”). Plainti ff s have identi fi ed no alternative recordkeeper that would have accepted such a low fee or any fee lower than what was paid to Fidelity and TIAA. And plainti ff shave failed to explain how a hypothetical lower-cost recordkeeper would perform at the leve l necessary to serve the best interests of the plans’ participants. 10 We fi nd no ERISA violation with Northwestern’s recordkeeping arrangement.

10 At any rate, plan participants had options to keep the expense ratios (and, therefore, recordkeeping expenses) low. The amount of fees paid were within the participants’ control because they could choose which funds to invest the money in their account. See Divane, 2018 WL 2388118at *10. Participants could invest in various low-cost index funds with expense ratios ranging between .05% and .1%: Fidelity 500 Index (Inst)No. 18-2569 19

3
Plainti ff s further alleged Northwestern breached its fi duciary duties by providing investment options that were too numerous, too expensive, or underperforming. As alleged, some of these options were retail funds with retails fees, some had “unnecessary” layers of fees , and some could have been cheaper but Northwestern failed to negotiate be tt er fees. Am. Compl. ¶¶ 264–66. Plainti ff s also spill much ink in theiramended complaint describing their clear preference for lowcost index funds. We unders tand their preference and acknowledge the industry may be trending in favor of these types of o fferings. Am. Compl. ¶¶ 188–205. Plainti ff s failed toallege, though, that Northwestern did not make their preferred o fferings available to them. In fact, Northwestern did. Plainti ff s simply object that numerous additional funds were

o ff ered as well. But the types of funds plainti ff s wanted (lowcost index funds) “ were and areavailable to them,” Divane,2018 WL 2388118 at *8, eliminating any claim that plan participants were forced to stomach an unappetizing menu.

(FXSIX) at an expense ratio of .05%; TIAA-CREF S&P 500 Index at .06%; Fidelity Spartan 500 Index at .1%; Fide lity 500 Index at .1%; Fidelity International Index at .1%; Fidelity Total Market Index at .1%; Vanguard Small Cap Index at .1%. Id. at *8. Am. Compl. ¶¶ 161, 176. Based on plaintiffs’ allegations regarding the number of plan participants and the individual fees paid, average expense ratios fo r the plans ranged between .125% to .2% (for the Voluntary Savings Plan) and between .14% and .197% (for the Retirement Plan), with average re cordkeeping costs lower than these ranges. See id. at *10. App. Br. at p. 33. The available investment options, then, reflect expense ratios that are low, id. at *8, and fees that “are reasonable as a matter of law.” Id . at *10.20 No. 18-2569

Regarding retail fees, plainti ff s invoke the Eighth Circuit’s decision in Braden v. Wal-Mart Stores, Inc. , 588 F.3d 585 (8th Cir. 2009), as applied by this court in Allen v. GreatBanc Trust Co. , 835 F.3d 670 (7th Cir. 2016), to suggest a blanket prohibition on retail share classes. But Allen cited Braden only to support its analysis of the pleadi ng burden for prohibited transaction claims under ERISA, see Allen , 835 F.3d at 676, 678, not to question the prudence of o ff ering retail share class funds. Moreover, Braden is distinguishable on its facts. There, thecourt found imprudence because the investment plan included a “relatively limited menu of funds”—ten—which “were chosen to bene fi t the trustee at the expense of the participants.” Braden , 588 F.3d at 596; see Loomis , 658 F.3d at 671 (distinguishing Braden on that basis). The plans here o ffered hundreds of options—over 400 combined—making a claim of imprudence less plausible. See Braden , 588 F.3d at 596 n.6. Similarly, plainti ff s rely on the Third Circuit’s holding in Sweda v. Univ. of Pa. , 923 F.3d 320 (3d Cir. 2019), to fi nd “a meaningful mix and range of investment options [does not] insulate[] plan fi duciaries from liability for breach of fi duciary duty.” 923 F.3d at 330. But despite plainti ff s’ contention to the contrary, the court did not disregard the mix of o ff ered investment options. Rather, the court in Sweda declined to fi nd a “bright-line rule that providing a range of investment options satis fi es a fi duciary’s duty” because “[ p]ractices change over time, and bright-line rules would hinder courts’ evaluation of fi duciaries’ performance against contemporary industry practices.” Id. (internal quotations omi tt ed). The court determined it need not look only atthe available range of o fferings but would consider that range in the context of the fi duciary’s overall performance. The court reiterated that “ERISA fi duciaries have a duty to act prudently according to currentNo. 18-2569 21

practices,” and that any “bre ach claim must be examined against the backdrop of the mix and range of available investment options.” Id. The Third Circuit’s approach is sound and not inconsistent with our own.
We concluded in Heckerand Loomis that plans may generally o ff er a wide range of investment options and fees without breaching any fi duciary duty. Loomis , 658 F.3d at 673–74; Hecker, 556 F.3d at 586 (no breach of fi duciary duty where401(k) plan participants could choose to invest in 26 investment options and more than 2,500 mutual funds through abrokerage window). Concerning the plans’ alleged underperformance, this court has determined “the ultimate outcome of an investment is not proof of imprudence.” DeBruyne v. Equitable Life Assurance Soc’y of the United States , 920 F.2d 457, 465 (7th Cir. 1990); see also Jenkins v. Yager, 444 F.3d 916, 926 (7th Cir. 2006) (“Investment losses are not proof that [a fi duciary] violated his duty of care.”) . We see both principles at play in this case. Not only did Northwestern provide theplans with a wide range of investment options, it also provided prudent explanations for the challenged fi duciary decisions involving alleged losses or underperformance. Plainti ff spleaded the same prudent reasons in their amended complaint. We echo the district cour t in concluding that such allegations do not add up to a breach of fi duciary duty.

4 In their amended complaint, plainti ff s also a tt empted to repackage their imprudent fi duciary claims as prohibited transactions claims. They relied largely on the same facts and allegations and provided no independent argument showing those facts or allegations reve al impermissible transactions. Plainti ff s merely assert that each allegedly unreasonable fee22 No. 18-2569

collected from plan participants for recordkeeping costs constituted a prohibited transaction under ERISA, 29 U.S.C. § 1106(a)(1)(D). Under § 1106(a)(1)(D), a fi duciary is prohibited from engaging in a transaction he knows or should know “constitutes a direct or indirect transfer to, or use by or for the bene fi t of a party in interest, of any assets of the plan.” Here, plainti ff s failed to plausibly allege the basic elements of their claim; namely, that any defendant bene fi ted from the collected fees, that the fees were assets of th e plans, or that any defendant knew or should have known that collecting routine fees may violate ERISA. In fact, this court has held that after a fee is collected by a recordkeeper, the amount of those fees becomes the property of the fund such that the transfer of some of it for recordkeeping costs is not a transfer of plan assets. See Hecker, 556 F.3d at 584 (“Once the fees are collected from the mutual fund’s assets and transferred to [the recordkeeper], they become [the recordkeeper’s] asse ts—again, not assets of the Plans”)). Ignoring their pleading burden, plainti ff s concludedthat dismissal of their claims on this ground should be reversed for the same reasons they argued the above claims should be reversed. For the same reasons we discussed above on the fi duciary duty claims, plainti ff s have failed to state a prohibited transaction claim.

*** Construing the facts and allegations in plainti ff s’ favor, the amended complaint fails to plausibly allege a breach of fi duciary duty under ERISA. Taken as a whole, the amended complaint appears to re fl ect plainti ff s’ own opinions on ERISA and the investment strategy they believe is appropriate for people without specialized knowledge in stocks or mutualNo. 18-2569 23

funds. Ultimately, defendants “cannot be faulted for” leaving“choice to the people who have the most interest in the outcome.” Loomis , 658 F.3d at 673–74.

B We consider now the district court’s denial of plainti ff s’ request to fi le a second amended complaint. This court reviews a denial of a motion for leave to amend a complaint for abuse of discretion. Hukic v. Aurora Loan Servs. , 588 F.3d 420, 432 (7th Cir. 2009). “[D]istrict courts have broad discretion to deny leave to amend where there is undue delay, ... undue prejudice to the defendants, or where the amendment would be futile.” Arreola v. Godinez , 546 F.3d 788, 796 (7th Cir. 2008). “A new claim is futile if it wo uld not withstand a motion to dismiss.” Vargas-Harrison v. Racine Uni fi ed Sch. Dist. , 272 F.3d 964, 974 (7th Cir. 2001). In their proposed second amended complaint, plainti ff s sought to add four new claims, three regarding breach of fi

duciary duty generally and one regarding prohibited transactions. The district court denied plainti ff s’ request for leave to fi le the second amended complaint for two reasons: plainti ff s unduly delayed bringing the claims, and the four proposed counts failed to state claims fo r relief and did not state new or additional claims. We agree.
Plainti ff s did not even a tt empt in their brief to explain the undue delay. Instead, plainti ff s note they were “separat[ing] out” the claims that had prev iously been included in the amended complaint as Count V. And, as further evidenced by plainti ff s’ desire to separate out their underlying claims, none of the four new claims advanc e arguments that were unavailable to plainti ff s at the time they asked the court for leave to24 No. 18-2569

fi le their second amended complaint. Although plainti ff s dress up the claims with di fferent language in the second amended complaint, they rely on the same allegations and facts, revealing these claims as essentially the same claims separated into di ff erent counts. Because they are essentially the same claims, they too su ffer from a lack of proper pleading.
C Finally, we consider the district court’s decision to reject plainti ff s’ jury demand. This court reviews de novo the determination that no right to a jury trial exists. Int’l Fin. Servs. Corp. v. Chromas Techs. Canada, Inc. , 356 F.3d 731, 735 (7th Cir. 2004). Although we need not reach th e district court’s decision here because we a ffi rm dismissal, it is worth noting the court’s general position on this poin t. The Supreme Court has held there is no right to a jury trial on this type of claim. See CIGNA Corp. v. Amara , 563 U.S. 421, 439 (2011) (“[A] suit by a bene fi

ciary against a plan fi duciary (whom ERISA typically treats as a trustee) ... is the kind of lawsuit that, before the merger of law and equity, [plainti ff s] could have brought only in a court of equity, not a court of law.”). This court has held the same: “The general rule in ERISA cases is that there is no right to ajury trial because ERISA’s antecedents are equitable, not legal.” McDougall , 494 F.3d at 576 (quoting Mathews , 144 F.3d at 468); see also Pa tt on , 480 F.3d at 484 (recognizing the “general rule in ERISA cases, where the plainti ff has no right to a jury trial”). Because this case involves a suit against a fi duciary for breach of trust, the traditional equitable remedy is surcharge (the requirement to make the bene fi ciary whole for any losses caused by the breach), not a legal remedy. See CIGNA , 563 U.S.No. 18-2569 25

at 440–43. We follow binding precedent and conclude no right to a jury trial exists in this ERISA case.
IV
For the reasons above, we AFFIRMthe district court’s dismissal of plainti ff s’ amended complaint on all counts and
AFFIRM the decision to deny plainti ff s’ request for leave to further amend the complaint and for a jury trial.