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Plansponsor Magazine, November 2011
Case Sensitive:Win, Win
Loomis, et al. v. Exelon
Corporation, et al. 09-4081 & 10-1755
The Venue: United States Court of Appeals for the 7th Circuit
The Issue: Under ERISA, are plan administrators allowed to offer only retail mutual funds as a means of investment and require
that the participants bear the cost burden of those expenses?
The Ruling: Relying on precedent set in Hecker v.
Deere & Co., a previous ruling by the 7th Circuit, the court ruled in favor of the Exelon Corporation, deciding that the
use of retail mutual funds was allowable under ERISA because market competition would be sufficient to ensure that fees would
be reasonable. Here, the 7th Circuit noted that “the district court decided that the current suit is a replay
of Hecker and dismissed it on the pleadings,” and, despite some discussion of the issues, upheld the lower court’s
dismissal—with prejudice—of the case.
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