The U.S. District Court for the Southern District of California granted Thermo Fisher Scientific Inc.'s motion to dismiss claims regarding the improper use of forfeitures in the company's 401(k) plan. The plaintiff alleged that using forfeitures to offset future employer contributions, rather than plan expenses charged to participant accounts, constituted a breach of fiduciary duties.
The court determined that the plan fiduciaries did not breach their duties by using forfeitures to pay administrative expenses, as ERISA does not require a fiduciary to maximize pecuniary benefits. The plan document explicitly allowed forfeitures to be allocated for two purposes: to pay reasonable expenses of the Plan or to reduce the Company's Discretionary Contributions, Matching Contributions, and/or other contributions.
This decision aligns with prior rulings in similar cases, reinforcing that employers are not penalized for following established regulatory authority and common practices in 401(k) plan management. The court concluded that the plaintiff's claims were too broad to be plausible under ERISA's fiduciary provisions.
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