Dawson

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OHIO

Simon Dawson, Case No. 1:25-cv-00852-PAB

Plaintiff,

-vs-

JUDGE PAMELA A. BARKER

Brookfield Asset Management LLC, et al.

Defendants. MEMORANDUM OPINION & ORDER

Currently pending before the Court is Defendants Brookfield Asset Management LLC and

Brookfield 401(K) Savings Plan Investment Committee’s Motion to Dismiss. (Doc. No. 18.) Plaintiff

filed an Opposition to Defendants’ Motion to Dismiss on July 23, 2025, to which Defendants replied

on August 6, 2025. (Doc. Nos. 19, 20.) For the following reasons, Defendants’ Motion to Dismiss

(Doc. No. 18) is GRANTED.

I. Allegations in the Complaint

Plaintiff, on behalf of himself and a proposed class, brings this action pursuant to the

Employment Retirement Income Security Act (“ERISA”). Specifically, Plaintiff alleges that

Defendants Brookfield Asset Management, LLC (“Brookfield”) and the Brookfield 401(k) Savings

Plan Investment Committee (the “Committee,” and together with Brookfield, “Defendants”)

“breached their fiduciary duties to Plaintiff and the Class when they: (1) selected and retained

imprudent American Century Fund Target Date Funds (the ‘American Century TDFs’) when prudent,

more suitable TDF ‘meaningful benchmarks’ were readily available at the beginning of and

throughout the Class Period; and (2) failed to monitor fiduciaries responsible for Plan administration

and management on the Committee regarding their selection and retention of the American Century

TDFs.” (Doc. No. 1, ¶ 3.) The following facts are alleged in Plaintiff’s Class Action Complaint (the

“Complaint”).

A. Plaintiff is a participant in the Brookfield Plan

“The Brookfield Plan is a defined contribution employee pension benefit plan under 29 U.S.C.

§ 1002(2)(A) and § 1002(34).” (Doc. No. 1, ¶ 38.) “Brookfield is the Plan sponsor under 29 U.S.C.

§ 1002(16)(B).” (Id. at ¶ 40.) Brookfield “serves as the Plan Administrator” and as such, “is also a

fiduciary with day-to-day administration and operation of the Plan under 29 U.S.C. § 1002(21)(A),”

and “has authority and responsibility for the control, management, and administration of the Plan in

accord with 29 U.S.C. § 1102(a).” According to Plaintiff, Brookfield “delegated fiduciary authority

to the Committee.” (Id. at ¶ 49.) “The Plan’s assets under management makes it among the largest

plans in the United States” because it “maintained close to or over $1 billion in assets” and “has had

more than 8,000 participants since 2019.” (Id. at ¶ 50.)

Plaintiff “was a participant in the Plan” while he “was employed by Brookfield between 2021

and 2023.” (Id. at ¶ 41.) Among others, Plaintiff held the following two investments in the plan: the

“American Century Retirement 2040 Trust Class III and th[e] American Century Retirement 2045

Trust Class III.” (Id. at ¶ 42.) According to Plaintiff, he “did not have knowledge of all material

facts (including, among other things, regarding the imprudence (sic) selection, and maintenance of,

the American Century TDFs) necessary to understand that Defendants breached their fiduciary duties

and engaged in other unlawful conduct in violation of ERISA until shortly before this suit was filed.”

(Id. at ¶ 45.) Plaintiff “having never managed a large 401(k) Plan such as the Plan, lacked actual

knowledge of prudent Plan investments or the prudent alternative investments available to the Plan.”

(Id. at ¶ 46.) He “did not have actual knowledge of the specifics of Defendants’ decision-making

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processes with respect to the Plan (including Defendants’ processes for maintaining and monitoring

the Plan’s investments) because this information is solely within the possession of Defendants prior

to discovery.” (Id.)

Based on Plaintiff’s lack of direct knowledge as to how the Plan was managed, “Plaintiff has

drawn reasonable inferences regarding these processes based upon (among other things) the facts set

forth [in the Complaint].” (Id.)

B. According to Plaintiff, the American Century TDFs were an imprudent

investment

“The American Century TDFs had been included as investment options in the Brookfield Plan

for many years prior to the beginning of the Class Period.” (Id. at ¶ 51.) “The Committee was

responsible for crafting the Plan’s investment lineup, as well as adding new funds and removing old

funds, and could have chosen other target date fund families than the American Century TDFs at or

any time before or after the beginning of the Class Period.” (Id. at ¶ 52.) Defendants “selected the

TDFs as the [qualified default investment alternative] for Plan participants’ retirement savings and

for company matching contributions.” (Id. at ¶ 54.) “[U]nless participants affirmatively directed

otherwise, Defendants automatically directed participants’ savings into the American Century

TDFs.” (Id. at ¶ 54.) Based on this, “the American Century TDFs held more of the Plan’s assets

than any other investment option in the Plan throughout the Class Period, by a significant margin.”

(Id. at ¶ 55.) Plaintiff asserts that “[a]s a jumbo plan with hundreds of missions (sic) of dollars to

invest in a target date fund, the Plan would have been able to choose virtually any available target

date funds for the Plan by the start of the Class Period,” but the “American Century Target Date

Series are the only target date investing options in the Plan.” (Id. at ¶¶ 56–57.)

Plaintiff alleges, however, that “[a]s a result of numerous defects in their fiduciary process,

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the Plan Committee has not yet removed the American Century TDFs from the Plan as of the date of

this Complaint, years later than they should have.” (Id. at ¶ 52.) Plaintiff asserts that he has

“allege[d] several meaningful performance benchmarks” and that “American Century TDFs fell

below each of them.” (Id. at ¶ 60.)

1. According to Plaintiff, the American Century TDFs underperformed

their own market benchmark

Plaintiff alleges that “[t]he American Century TDFs underperformed their own benchmark,

the S&P Target Date index, before and during the Class Period.” (Id. at ¶ 61.) Plaintiff asserts that

(1) “[f]or the three-year period ending on December 31, 2018, the American Century TDFs

underperformed their S&P Benchmark” by 0.68% to 1%, (2) [t]he same pattern of underperformance

for the American Century TDFs continued after January 1, 2019” by 0.39% to 1.67%, and (3) “the

underperformance of the American Century TDFs has become more severe since 2021” by 0.57% to

2.80%. (Id. at ¶¶ 62–64.)1

2. According to Plaintiff, the American Century TDFs underperformed

“Other Large TDFs” on the market

Plaintiff alleges that, in 2018, the largest TDF families in the market were the Vanguard

Target Retirement Series, the Fidelity Freedom Series, the Capital American Target Date Retirement

Series, the T. Rowe Price Retirement Series, the JPM SmartRetirement Series, the Nuveen Lifecycle

Series, the BlackRock LifePath Index, the Principal LifeTime Series, the Nuveen Lifecycle Index

Series, the American Century One Choice Series, the Fidelity Advisor Freedom Series, and the

JPMorgan SmartRetirement Blend Series (the “Large TDF Comparator Funds”). (Id. at ¶ 65.) “The

1 Plaintiff includes several charts supporting his claims of underperformance in the Compliant. These charts contain

several metrics for why Plaintiff believes the American Century TDFs underperformed their alleged peers. The Court

has considered these figures in reaching its decision today, but the Court has not reproduced Plaintiff’s charts in this

Memorandum Opinion and Order.

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Large TDF Comparator Funds were available to the Defendants to include as investment options for

the Plan, and thousands of other ERISA plan fiduciaries selected these Large TDF Comparator Funds

for their plans as well.” (Id. at ¶ 68.)

Plaintiff alleges that “the American Century TDFs have also underperformed compared to the

Large TDF Comparator Funds during the three-year period ending December 31, 2018, and since

2019 and 2021.” (Id. at ¶ 66.) Plaintiff alleges that the American Century TDFs underperformed

the Large TDF Comparators (1) by 1.59% to 2.36% during the three-year period preceding December

31, 2018; (2) by 1.19% to 2.77% since January 1, 2019; and (3) by 0.89% to 2.73% since January 1,

2021. (Id.)

According to Plaintiff, “[a]ll of the Large TDF Comparator Funds had similar structure,

objectives, strategy, and risk profile to the American Century TDFs, and all were designed to provide

essentially the same type of investment experience to plan participants: ‘a long-term investment

strategy based on holding a mix of stocks, bonds and other investments (this mix is called an asset

allocation) that automatically changes over time as the participant ages.’” (Id. at ¶ 67.) These TDF

families “were, like the American Century TDFs, included in the ‘Target Date’ Morningstar

category.” (Id. at ¶ 70.) Plaintiff claims that “[a]ny reasonably prudent fiduciary determining which

target date funds to offer the Plan’s participants was or should have been aware of the Large TDF

Comparator Funds and should have compared the performance of the American Century TDFs to the

performance of these comparator TDFs.” (Id. at ¶ 69.)

3. According to Plaintiff, the American Century TDFs underperformed

other TDFs with the same Morningstar Categorization

Plaintiff asserts that “Morningstar, the most well respected and accepted financial industry

fund database has created the Morningstar Lifetime Moderate Index category as the index category

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for target date funds.” (Id. at ¶ 71.) “A Morningstar Category is assigned by placing funds into peer

groups based on their underlying holdings.” (Id. at ¶ 72.) “The underlying securities in each portfolio

are the primary factor in [Morningstar’s] analysis . . . . Funds are placed in a category based on their

portfolio statistics and compositions over the past three years. Analysis of performance and other

indicative facts are also considered.” (Id.) Morningstar groups funds “into categories according to

their actual investment style, not merely their stated investment objectives, nor their ability to

generate a certain level of income.” (Id. at ¶ 73.) “Morningstar normally allocates funds to categories

on the basis of their portfolio holdings” and “[s]everal portfolios are taken into account to ensure that

the fund´s real investment stance is taken into account.” (Id.) According to Plaintiff, “Morningstar

categories are more reliable than simply comparing fund prospectuses, because Morningstar is a third

party providing neutral information.” (Id. at ¶ 74.)

Plaintiff claims that “Morningstar is particularly meaningful here because the American

Century target date funds use Morningstar data to provide publicly available information.” (Id. at ¶

75.) “For example, American Century’s own dissemination of information explains that the

Morningstar ratings for the 2045 vintage were only one star for the overall returns (out of 180 funds),

three-year returns, five-year returns, and 10-year returns.” (Id. at ¶ 76.)

Plaintiff compares the American Century TDFs to what he describes as the “Morningstar

Comparator Funds.” “The Morningstar Comparator Funds are grouped in the same Morningstar

Category as the American Century Target Date Series.” (Id. at ¶ 80.) The Morningstar Comparator

Funds are comprised of the “T. Rowe Price Retirement Target Date A Series, the American Funds

Target Date R6 Series, the Callan GlidePath® Target Date R6 Series, the MoA Clear Passage Target

Date Series, the Natixis Target Date N Series, the Nuveen Lifecycle Target Date R6 Series and Voya

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Target Date CIT Series.” (Id. at ¶ 79.)

Plaintiff alleges that “[a] closer look at the American Century Target Date Series and

Morningstar Comparator Funds further demonstrate they had similar underlying investments and

strategies.” (Id. at ¶ 81.) “The American Century Target Date Series and each of the Morningstar

Comparator Funds are Large Cap Blend series, meaning their underlying holdings are a combination

of active and passive investments.” (Id. at ¶ 82.) And “[t]he American Century Target Date Series

and all of the Morningstar Comparator Funds have a ‘through’ glidepath.” (Id. at ¶ 85.)2

Plaintiff alleges that “[t]he 2045 vintage is a good demonstration of the American Century

Target Date Series and the Morningstar Comparator Funds’ asset allocations because the target date

is neither too close nor too distant.” (Id. at ¶ 87.) According to Plaintiff, “[t]he asset allocation is

sufficiently similar across all funds, where U.S. Equities are the largest percentage of holdings, non-

U.S. equities range from 20.07-29.57% of holdings, and the remaining holding are Fixed Income (or

bonds), Cash investments, and less than one percent of ‘other’ and ‘not classified’ investments.” (Id.)

Plaintiff asserts that “the American Century TDFs have been consistently underperforming

for almost ten years, as they consistently failed to meet their own benchmark and numerous other

TDF families had better performance over almost ten years.” (Id. at ¶ 86.) Based on the charts

included with the Complaint, Plaintiff alleges that “the American Century TDFs . . . consistently

underperformed compared to the Morningstar Comparator Funds . . . in their Morningstar Categories

and their Morningstar benchmarks . . . on a 3-year average basis.” (Id. at ¶ 90.)

Plaintiff further alleges:

2 According to Plaintiff, “[g]lide paths in retirement funds come in two main types: ‘to’ and ‘through.’ ‘To’ glide paths

reach their most conservative allocation at the target retirement date and stay there, while ‘through’ glide paths continue

to adjust and become more conservative for several years after the retirement date.” (Doc. No. 1, ¶ 84 (quoting Johnson

v. Parker-Hannifin Corp., 122 F.4th 205 (6th Cir. 2024).)

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• that (1) “in 2019, the 2030-2060 vintages of the American Century TDFs

underperformed against the Morningstar Comparator Funds’ corresponding vintages

36 out of 41 instances (88%),” (2) “[i]n 2021, the same vintages underperformed

against the Morningstar Comparator Funds’ corresponding vintages in all 49 instances

(100%),” and (3) “[i]n 2023 and 2024, the 2030-2065 vintages of the American Century

TDFs underperformed against the Morningstar Comparator Funds’ corresponding

vintages in all 55 instances (100%), and in all 56 instances (100%), respectively, and

(4) “[i]n total and since 2017, the American Century TDFs underperformed the

Morningstar Comparator Funds on a 3-year lookback period in 196 out of 201

instances, or 98% of the time.” (Id.)

• that (1) “in 2019, the 2030-2060 vintages of the American Century TDFs

underperformed against the Morningstar Comparator Funds’ corresponding vintages

35 out of 35 instances (100%),” (2) “[i]n 2021, the same vintages underperformed

against the Morningstar Comparator Funds’ corresponding vintages in 39 out of 41

instances (95%),” (3) “[i]n 2023 and 2024, the same vintages underperformed against

the Morningstar Comparator Funds’ corresponding vintages in all 49 instances

(100%),” (4) “[i]n total, and since 2015, the American Century TDFs underperformed

the Morningstar Comparator Funds on a 5-year lookback period in 172 out of 174

instances, or 99% of the time,” and (5) “2030-2060 vintages of the American Century

TDFs underperformed against the Morningstar benchmarks on a 5-year average basis

in every instance in 2019, four out of seven instances in 2021, three out of seven

instances in 2023, and three out of seven instances in 2024.” (Id. at ¶¶ 92–93.)

• that “the American Century Target Date Series continuously ranked poorly as

compared to its peers in its Morningstar Category on a 3-year average basis since before

and throughout the Class Period.” (Id. at ¶ 94.)

• that “[t]he American Century Target Date Series also continuously ranked poorly as

compared to its peers in its Morningstar Category on a 5-year average basis since before

and throughout the Class Period.” (Id. at ¶ 95.)

• that “starting in 2019, the 2030-2065 vintages of the American Century TDFs

underperformed against each of the Morningstar Comparator Funds’ corresponding

vintages on a one-year cumulative return basis in 211 out of 216 instances, or 98% of

the time, [and] underperformed the Morningstar benchmarks in 28 out of 31 instances.”

(Id. at ¶ 96.)3

To support these allegations, Plaintiff included several charts comparing the American

Century TDFs’ performance to the Morningstar Comparator Funds’ performance on a one-, three-,

3 Plaintiff omitted data from 2020 and 2022 when making this allegation.

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and five-year basis. Based on these charts, and Plaintiff’s allegations, the American Century TDFs

did at times outperform the Morningstar Comparator Funds. Excluding those instances, based on the

one-year performance data alleged in the Complaint, the range of outperformance generally was

between 2% and 5%, with some outliers as low as less than 1% and as high as 7.66%. (Doc. No. 1,

¶ 96; Appendix A.4) Based on the three-year annualized performance data alleged in the Complaint,

the range of outperformance generally was between less than 1% and 3% and never exceeded 4%.

(Doc. No. 1, ¶ 90; Appendix B.5) Based on the three-year annualized performance data alleged in

the Complaint, the range of outperformance generally was between less than 1% and 2%, and there

were only two instances of outperformance of an amount higher than 3%. (Doc. No. 1, ¶ 92;

Appendix C.6)

Based on this data, Plaintiff concludes that “that the American Century TDFs underperformed

in both good markets and bad markets.” (Id. at ¶ 97.) Plaintiff asserts that “[l]ooking at this data

together, the American Century TDFs underperformed across several metrics for years before the

Class Period, and for years into the Class Period.” (Id. at ¶ 98.) “This consistent underperformance

data was publicly available to the Committee at the time of their decision-making, whether they

reviewed the funds annually or quarterly (if at all).” (Id.) According to Plaintiff “[p]rudent fiduciaries

would have acknowledged that this pattern of underperformance did not bode well for the American

4 The Court has summarized the charts included in Paragraph 96 of the Complaint concerning the one-year cumulative

performance data in the Complaint into one chart in Appendix A. Appendix A shows the range of alleged

underperformance by year and by fund.

5 The Court has summarized the charts included in Paragraph 90 of the Complaint concerning the three-year annualized

performance data in the Complaint into one chart in Appendix B. Appendix B shows the range of alleged

underperformance by each three-year period and by fund.

6 The Court has summarized the charts included in Paragraph 92 of the Complaint concerning the five-year annualized

performance data in the Complaint into one chart in Appendix C. Appendix C shows the range of alleged

underperformance by each five-year period and by fund.

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Century TDFs’ future performance and would have made a timely switch to any of the numerous

safer, better managed, and ultimately more optimistic investment options.” (Id.) Plaintiff concludes

that “[g]iven the long history of underperformance, it’s inexplicable why the American Century TDFs

would have been included as Plan investment options by the start of the Class Period and kept in

place.” (Id. at ¶ 99.)

4. According to Plaintiff, the American Century TDFs’ poor performance

has led to declining market share compared to other TDF families

Plaintiff alleges that “the market has taken note of the American Century TDFs’

underperformance.” (Id. at ¶ 100.) “In 2016, the American Century TDFs had a roughly 1.5% market

share among TDFs,” but “[b]y the end of 2024, that market share had dwindled to 0.5%, or roughly

1/3 of its 2016 market share.” (Id.) According to Plaintiff, “while the industry as a whole has seen

nearly 100% growth (excluding investment returns), American Century has seen a nearly 40% decline

in assets as a result of redemptions.” (Id. at ¶ 101.)

C. Plaintiff alleges that the American Century TDFs had significantly above average

turnover rates

Plaintiff alleges that “[t]he American Century TDFs had significant turnover, however, much

higher than 30%, both before and during the Class Period.” (Id. at ¶ 106.)7 “During the period 2016-

2018, the funds underlying the American Century TDFs had an average turnover of 68% per year,

which rose to 72% per year over 2019-2023, more than double 30% starting in 2016, and substantially

higher than the turnover for peer TDFs.” (Id. at ¶ 107.) According to Plaintiff, “[a] turnover rate

above 30% ‘warrants closer inspection’ by investment professionals.” (Id. at ¶ 105.) Thus, Plaintiff

7 “Turnover rates measure how often a fund changes its investments, with higher rates meaning the fund frequently buys

and sells stocks or bonds.” (Doc. No. 1, ¶ 102.) “High turnover rates create meaningful transaction costs for funds.” (Id.

at ¶ 103.) “A higher-than-average turnover rate may indicate an investment manager’s lack of experience or an attempt

to mask a fund’s underperformance.” (Id. at ¶ 104.)

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claims that “the American Century TDF’s turnover was a significant red flag, and a prudent fiduciary

would have investigated the reasons for the high turnover and the impact the turnover was having on

the Plan and the participants’ retirement savings.” (Id. at ¶ 109.)

“Taken together, because of the underperformance and high turnover rates for the American

Century TDFs, Defendants were or should have been aware from the beginning of the Class Period

that the American Century TDFs were not an appropriate investment in the Plan.” (Id. at ¶ 110.)

Plaintiff asserts that the allegations in the Complaint “in no way uses hindsight,” and instead “is solely

based on information that Brookfield and the Committee had or should have had available to them.”

(Id. at ¶ 111.)

D. Defendants’ alleged imprudence caused harm to Plaintiff

“By failing to engage in an objectively reasonable fiduciary process when retaining and failing

to remove American Century TDFs from January 2019 until January 2025, Defendants breached their

fiduciary duties of prudence to Plaintiff and Plan participants and are liable to Plaintiff and Class

Members for the retirement monies lost through the imprudent investment in the American Century

TDFs through the Class Period.” (Id. at ¶ 113.) “Defendants caused objectively unreasonable losses

to Plaintiff and the Plan’s participants of more than $31 million from the beginning of the Class

Period, when considering the retirement losses suffered by Plaintiff and the Class by the Plan

Committee maintaining various versions of the American Century TDFs as the Plan’s default

investment.” (Id. at ¶ 114.)

II. Procedural History

Plaintiff filed this action on April 29, 2025 by filing his Complaint. (Doc. No. 1.) Therein,

Plaintiff brings two claims for relief: (1) “Breach of Duty of Prudence of ERISA, as Amended,” and

(2) “Failure to Adequately Monitor Other Fiduciaries under ERISA.” In response, Defendants filed

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their Motion to Dismiss on June 23, 2025. (Doc. No. 18.) On July 23, 2025, Plaintiff filed his

Opposition, to which Defendants replied on August 6, 2025. (Doc. Nos. 19, 20.)

On September 10, 2025, Plaintiff filed a Notice of Supplemental authority, to which

Defendants responded on September 16, 2025. (Doc. Nos. 21, 22.) On October 1, 2025, Plaintiff

filed a second Notice of Supplemental authority, to which Defendants responded on October 6, 2025.

(Doc. Nos. 24, 25.) On March 6, 2026, Plaintiff filed a third Notice of Supplemental authority, to

which Defendants responded on March 10, 2026. (Doc. Nos. 26, 27.)

Accordingly, Defendants’ Motion to Dismiss is ripe for review.

III. Standard of Review

In order to survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain (1)

‘enough facts to state a claim to relief that is plausible,’ (2) more than ‘formulaic recitation of a cause

of action’s elements,’ and (3) allegations that suggest a ‘right to relief above a speculative level.’”

Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (quoting in part Bell

Atlantic Corp. v. Twombly, 550 U.S. 544, 555–556 (2007)). For purposes of Rule 12(b)(6), “all well-

pleaded material allegations of the pleadings of the opposing party must be taken as true, and the

motion may be granted only if the moving party is nevertheless clearly entitled to judgment.”

JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007) (internal citation and

quotation marks omitted).

The measure of a Rule 12(b)(6) challenge — whether the Complaint raises a right to relief

above the speculative level — “does not ‘require heightened fact pleading of specifics, but only

enough facts to state a claim to relief that is plausible on its face.’” Bassett v. National Collegiate

Athletic Ass’n., 528 F.3d 426, 430 (6th Cir. 2008) (quoting in part Twombly, 550 U.S. at 555–556).

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“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009). Deciding whether a complaint states a claim for relief that is plausible is

a “context-specific task that requires the reviewing court to draw on its judicial experience and

common sense.” Id. at 679.

Consequently, examination of a complaint for a plausible claim for relief is undertaken in

conjunction with the “well-established principle that ‘Federal Rule of Civil Procedure 8(a)(2) requires

only a short and plain statement of the claim showing that the pleader is entitled to relief.’ Specific

facts are not necessary; the statement need only ‘give the defendant fair notice of what the ... claim

is and the grounds upon which it rests.’” Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir. 2009)

(quoting in part Erickson v. Pardus, 551 U.S. 89 (2007)). Nonetheless, while “Rule 8 marks a notable

and generous departure from the hyper-technical, code-pleading regime of a prior era ... it does not

unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Iqbal, 556

U.S. at 679.

IV. Pleading ERISA duty-of-prudence claims

Fiduciary duties under ERISA are “the highest known to law.” Johnson v. Parker-Hannifin

Corp., 122 F.4th 205, 213 (6th Cir. 2024) (quoting Chao v. Hall Holding Co., 285 F.3d 415, 426 (6th

Cir. 2002)). ERISA requires that a plan administrator discharge his duties “with the care, skill,

prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like

capacity and familiar with such matters would use in the conduct of an enterprise of a like character

and with like aims.” 29 U.S.C. § 1104(a)(1)(B). “The obligation includes ‘a continuing duty to

monitor trust investments and remove imprudent ones.’” Smith v. CommonSpirit Health, 37 F.4th

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1160, 1165 (6th Cir. 2022) (quoting Tibble v. Edison Int’l, 575 U.S. 523, 529 (2015)).

The duty of prudence is informed by trust law. Id. Under trust law, “[w]hether the trustee is

prudent in the doing of an act depends upon the circumstances as they reasonably appear to him at

the time when he does the act and not at some subsequent time when his conduct is called in question.”

Id. (citation omitted). As further explained by the Sixth Circuit:

The duty of prudence is a process-driven obligation. See Smith v. CommonSpirit

Health, 37 F.4th 1160, 1166 (6th Cir. 2022) (calling the duty of prudence "largely

a process-based inquiry"); Pfeil v. State St. Bank & Tr. Co., 806 F.3d 377, 384 (6th

Cir. 2015) (calling it a "prudent-process standard"); see also Davis v. Washington

Univ. in St. Louis, 960 F.3d 478, 482-83 (8th Cir. 2020). When we enforce the duty

of prudence, we focus on the fiduciary’s “real-time decision-making process, not

on whether any one investment performed well in hindsight.” Forman, 40 F.4th at

448; see also Restatement (Third) of Trusts § 77 cmt. a (2007). For an imprudent-

retention claim, we ask whether the fiduciary, at the time it chose to retain an

investment, “employed the appropriate methods to investigate the merits of the

investment.” Pfeil, 806 F.3d at 384 (quoting Hunter v. Caliber Sys., Inc., 220 F.3d

702, 723 (6th Cir. 2000)). The ultimate question is whether the fiduciary engaged

in a reasoned decision-making process when it decided to retain the

investment. Id.; see also Davis, 960 F.3d at 482 (“This statutory duty of prudence

establishes ‘an objective standard’ that focuses on ‘the process by which’ decisions

are made, ‘rather than the results of those decisions.’” (quoting Braden v. Wal-Mart

Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009))); Tatum v. RJR Pension Inv. Comm.,

761 F.3d 346, 356 (4th Cir. 2014).

Johnson, 122 F.4th at 213.

To plead a duty-of-prudence claim, a plaintiff is not required “to point to a higher-performing

fund to demonstrate imprudence.” Id. at 216. “A meaningful benchmark may sometimes be one

part of an imprudence pleading, but it is not required.” Id. “A plaintiff sufficiently states a claim of

imprudence if it pleads facts sufficient to give rise to an inference of insufficient process.” Id. (citing

Smith, 37 F.4th at 1165–66; Forman v. TriHealth, Inc., 40 F.4th 443, 446 (6th Cir. 2022)). “Even

when the alleged facts do not directly address the process by which the Plan was managed, a claim

alleging a breach of fiduciary duty may still survive a motion to dismiss if the court, based on

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circumstantial factual allegations, may reasonably infer from what is alleged that the process was

flawed.” Stark v. KeyCorp, No. 1:20-CV-01254, 2021 U.S. Dist. LEXIS 84813, at *16 (N.D. Ohio

May 4, 2021) (Barker, J.) (cleaned up).

While a comparator is not necessarily required, Sixth Circuit case law informs what a plaintiff

must plead to infer imprudence based upon a comparator. In Smith, the plaintiff compared “the

Fidelity Freedom Funds’ performance to the Fidelity Freedom Index Funds’ performance for a five-

year period, noting that the Freedom Funds trailed the Index Funds by as much as 0.63 percentage

points per year.” Smith, 37 F.4th at 1166. The Court found that the comparison between these two

funds was insufficient at the pleading stage for several reasons. First, in contrast to the actively

managed “Freedom Funds,” the “Freedom Index Funds,” “have the benefit of combining attractive

features of active and passive management.” Id. Based on the differences in management styles, the

Smith Court observed that “each fund has distinct goals and distinct strategies, making them inapt

comparators.” Id. at 1167. Second, the Smith Court found that “[m]erely pointing to another

investment that has performed better in a five-year snapshot of the lifespan of a fund that is supposed

to grow for fifty years does not suffice to plausibly plead an imprudent decision—largely a process-

based inquiry—that breaches a fiduciary duty.” Id. It reasoned that “[a] side-by-side comparison of

how two funds performed in a narrow window of time, with no consideration of their distinct

objectives, will not tell a fiduciary which is the more prudent long-term investment option.” Id.

Third, the Court found that the “Freedom Funds” actually outperformed the “Freedom Index Funds”

and “remained significantly more popular” as it “was the second-most popular target-date fund in the

entire industry by market share.” Id. at 1168.

Two years later, the Sixth Circuit decided Johnson in favor of the plaintiff. In that case, the

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plaintiff alleged that the “Focus Funds,” a passively managed fund, had a high turnover rate (90%)

and underperformed its own S&P target date benchmark. Johnson, 122 F.4th at 215–16. The Court

reasoned that the S&P benchmark “is inherently a meaningful benchmark” because “tracking an

industry-recognized index is the ‘investment goal’ of a passively managed target date fund such as

the Focus Fund.” Id. at 217. Accordingly, the Court held that “[w]here a complaint alleges that a

fund, by its design, sets a benchmark for itself and repeatedly fails to meet that benchmark, it is

perfectly appropriate to submit to a jury the prudence of the administrator's process in retaining the

fund despite that failure.” Id. at 218. As applied to the Complaint in Johnson, the Sixth Circuit found

that “it is certainly plausible that a prudent administrative process would find such performance

unacceptable and would result in the Focus Funds’ replacement,” and that “[i]t is for the jury to decide

whether the Funds’ failure to meet the S&P benchmark in fact meant that a prudent administrative

process would have resulted in their replacement.” Id. at 219.

V. Summary of the Parties’ Arguments

With these standards in mind, the Court next summarizes the parties’ arguments.

A. Defendants’ Motion to Dismiss

In their Motion to Dismiss, Defendants generally make five arguments as to why Plaintiff’s

duty-of-prudence claim fails, and one argument as to why Plaintiff’s failure-to-monitor claim fails.

Defendants argue that the duty-of-prudence claim fails because (1) the Morningstar Comparators are

not meaningful benchmarks for the American Century TDFs, (2) the Large TDF Comparators are not

meaningful benchmarks for the American Century TDFs, (3) the S&P Target Date Index is not a

meaningful benchmark for the American Century TDFs, (4) even if Plaintiff alleged an adequate

comparator, he has not alleged material underperformance, and (5) neither the alleged loss of market

share nor purported turnover rates constituted “red flags” requiring closer inspection of the prudence

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of the AmCen TDFs as a Plan option. Defendants argue that the failure-to-monitor claim fails

because it is derivative of Count One and Count One fails as matter of law.

The Court summarizes each of Defendants’ arguments in turn below.

1. Defendants argue that the Morningstar Comparators are not meaningful

benchmarks for the American Century TDFs

Defendants assert that “[t]he Morningstar Comparators are funds grouped by Plaintiff not for

any similarities in composition, objectives, strategies, or risk but, rather, based on their inclusion in

a Morningstar category.” (Doc. No. 18-1, PageID #138.) According to Defendants, “a shared

Morningstar label does not make one fund a meaningful benchmark for another.” (Id. at PageID

#138–39.) Defendants also assert that Plaintiff has not pled any non-conclusory facts establishing

that the Morningstar Comparators are adequate comparators. (Id. at PageID #139.) Defendants

contend that “Plaintiff’s own sources . . . make clear that the Morningstar Comparators do not all

have a mix of active and passive management styles.” (Id.) Defendants argue that Plaintiff failed to

sufficiently allege the management style (e.g. active or passive), the glide-path, and the asset

allocation of the American Century TDFs and the Morningstar Comparators. (Id. at PageID #139–

142.) Defendants conclude that “the many differences between the AmCen TDFs and the

Morningstar Comparators make the Morningstar Comparators inapt comparators.” (Id. at PageID

#142.)

2. Defendants argue that the Large TDF Comparators are not meaningful

benchmarks for the American Century TDFs

Defendants make similar arguments with respect to the Large TDF Comparators. Defendants

argue that “the dearth of allegations regarding investment objectives, strategies, and risk profiles

prevents the Large TDF Comparators from being a meaningful benchmark.” (Doc. No. 18-1, PageID

#142.) According to Defendants, “Plaintiff alleges no well-pleaded facts detailing the goals,

17

strategies, or risk tolerances of the Large TDF Comparators.” (Id. at PageID #143.) Defendants

assert that “[w]ithout information regarding the management styles, asset allocations, or glide paths,

Count I fails to the extent it is based on the Large TDF Comparators.” (Id.)

3. Defendants argue that the S&P Target Date Index is not a meaningful

benchmark for the American Century TDFs.

Defendants next argue that “Plaintiff’s final proposed comparator—the S&P Target Date

Index—likewise fails.” (Id. at PageID #143–44.) Defendants assert that “Plaintiff suggests, without

explanation or citation to any factual source, that the AmCen TDFs ‘were designed to meet industry-

recognized benchmarks,’ such that, ‘[b]y definition,’ they ‘share the same goals, strategies and risks

as the indices they [we]re designed to replicate.’” (Id. at PageID #143–44 (quoting Doc. No. 1, ¶

21).) According to Defendants, “[t]his assertion is intended to analogize to Johnson (whose language

Plaintiff invokes, see id.), where the challenged funds were passively managed and tracked a specific

market index.” (Id.) But, Defendants assert, “Plaintiff alleges that the AmCen TDFs have ‘a

combination of active and passive investments’ in their underlying holdings . . . making them

definitionally unlike the funds in Johnson.” (Id. at PageID #144 (quoting Doc. No. 1, ¶ 82).)

Defendants further argue that “[t]he S&P Target Date Index is not a meaningful benchmark for other

reasons, too, including because it is not an actual investment option available to investors.” (Id.)

Defendants conclude that “Plaintiff’s failure to properly tailor his allegations to account for fund-

specific differences suggests that the actual nature of his dispute is with fund strategy, which does

not state a claim for breach of the duty of prudence.” (Id. at PageID #144–45.)

4. Defendants argue that even if Plaintiff had identified a meaningful

comparator for the American Century TDFs, the lack of material

underperformance—or, in some cases, lack of any underperformance—

defeats a cause of action for imprudence.

Defendants next argue that “the Complaint also fails because it does not allege

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underperformance by the AmCen TDFs from which the Court can infer imprudence.” (Id. at PageID

#145.) Defendants argue that “the Complaint reflects that the AmCen TDFs saw positive returns on

investments year after year, per every slice of performance data cited by Plaintiff.” (Id.) Defendants

further argue that “even though some proposed comparators performed better in certain cherry-picked

years . . . a small degree of underperformance is weak circumstantial evidence that is insufficient to

infer fiduciary breach, as fiduciaries are not required to pick the best performing fund.” (Id. at PageID

#145–46 (internal quotations omitted).) According to Defendants, “district courts around the country

have rejected [prudence-based] breach of fiduciary duty claims based on . . . alleged short-term

differences in performance of between 1.14[%] to 4.4%, which they deem immaterial.” (Id. at PageID

#146 (internal quotations omitted).) And here, Defendants assert that “the maximum alleged

underperformance for any AmCen TDF vintage versus another TDF over any three- or five-year

period selected by Plaintiff is 3.88%, below the threshold that courts find potentially reflects material

underperformance from which imprudence may be inferred.” (Id.) Further, Defendants assert that

“Plaintiff’s own allegations reflect that the AmCen TDFs actually achieved higher returns versus

some proposed comparators across certain periods of time cherry-picked by Plaintiff.” (Id. at PageID

#147.) Finally, Defendants claim that the rest of the performance picture is laid out when one

considers that Plaintiff conspicuously buries—or outright omits—performance data for certain

years.” (Id.)

5. Defendants argue that neither alleged loss of market share nor purported

turnover rates constituted “red flags” requiring closer inspection of the

prudence of the AmCen TDFs as a Plan option.

Defendants also challenge Plaintiff’s allegations concerning market share and turnover rates.

As to the former, Defendants assert that “Plaintiff devotes all of two paragraphs to pleading his

19

market-share argument for imprudence,” but in those paragraphs, “Plaintiff pleads that the TDF

market has seen monumental growth, nearly doubling in size over a selected period of time.” (Id. at

PageID #149.) Defendants claim that “[i]n such a fast-growing market, any TDF that did not take in

new money at the same pace that the market expanded would, by definition, ‘lose’ market share.”

(Id.) Defendants assert that if “the AmCen TDFs were one of the twelve largest TDF suites in 2018,”

then it would have “remained one of the largest such funds, given that Plaintiff insists that the Large

TDF Comparators are meaningful benchmarks throughout the Class Period.” (Id.)

With respect to the turnover rate allegations, Defendants assert that “Plaintiff conflates the

alleged turnover of the funds underlying the AmCen TDFs with the supposed turnover of the AmCen

TDFs themselves.” (Id.) Defendants further assert that “Plaintiff submits no allegations regarding

the turnover rates of any of his proposed comparators, as would be needed to assess whether the

AmCen TDF turnover rates stood out (or were ‘red flags’) or were on par with the industry.” (Id. at

PageID #150.) According to Defendants, “the article Plaintiff cites identifies turnover rates for

numerous fund managers with TDF suites that Plaintiff promotes as comparators, and many of those

turnover rates are higher than the ‘red flag’ threshold adopted by Plaintiff.” (Id.)

6. Defendants argue that Count Two fails as a matter of law

Defendants argue that “Plaintiff’s duty-to-monitor claim hinges on the viability of his

underlying duty-of-prudence claim[,]” and therefore, “Plaintiff’s failure to state a claim for

imprudence forecloses a claim for breach of the duty to monitor, and Count II must be dismissed.”

(Id. at PageID # 150.)

B. Plaintiff’s Opposition

In response, Plaintiff largely ignores many of Defendants’ arguments. Importantly, he does

not respond to Plaintiff’s arguments concerning underperformance. Instead, Plaintiff’s

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counterargument hinges solely on his interpretation of Johnson. According to Plaintiff, Johnson “is

materially similar” to this case and “has satisfied his pleading standard set out by the Sixth Circuit in

Johnson.” (Doc. No. 19, PageID #249, 258.)

Plaintiff likens Johnson to his case in several ways:

• “Similar to the American Century TDFs in this case, [f]rom the time the Focus Funds

launched until 2013, the Funds underperformed the S&P target date fund benchmark,

an industry-accepted target date benchmark for Through target date funds used by

investment professionals.” (Id. at PageID #250 (internal quotations omitted).)

• “Also much like the America Century TDFs, ‘[i]n addition to underperforming

industry standards, the Focus Funds also faced high turnover rates. Turnover rates

measure how often a fund changes its investments, with higher rates meaning the fund

frequently buys and sells stocks or bonds.’” (Id. at PageID #250 (quoting Johnson,

122 F.4th at 209).)

• “Finally, like the large percentage of the overall Plan the American Century TDFs

make up in the present case . . . the Focus Funds ‘constituted approximately $800

million of Plan participants’ retirement savings,’ a very large fraction of the total plan

assets.” (Id. at PageID #250 (quoting Johnson, 122 F.4th at 209).)

• “The plaintiff in Johnson pointed to three defects that he claimed should have

prompted a prudent fiduciary to remove the Focus Funds. Two are relevant here. First,

Johnson argued that a prudent fiduciary would ‘monitor changes in strategy or asset

holdings,’ and ‘monitor a fund’s turnover ratio and understand that excessive turnover

can mean that the manager is attempting to remedy underperformance by deviating

from the fund's strategy, warranting further scrutiny.’ Because the Focus Funds had

‘major changes in asset holdings, extremely high turnover, and substantial transaction

costs,’ a prudent fiduciary would have removed the Funds. Second, the plaintiff in

Johnson argued that a prudent fiduciary would have removed the Focus Funds based

on its underperformance compared to the S&P target date fund benchmark and

alternative target date funds.” (Id. at PageID #250–251 (internal citations omitted).)

• “So, like the Focus Funds challenged in Johnson, the American Century TDFs were

designed to meet industry-recognized benchmarks, the S&P Target Date Index. By

definition, the American Century TDFs share the same goals, strategies, and risks as

the indices they are designed to mimic.” (Id. at PageID #256–57.)

• “Plaintiff has satisfied his pleading standard set out by the Sixth Circuit in Johnson,

and Plaintiff has sufficiently pleaded that the American Century TDFs were

attempting to mimic the S&P target date fund, making it a meaningful benchmark.”

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(Id. at PageID #258.)

But Plaintiff acknowledges that Johnson’s facts were distinguishable in certain ways:

• “The Focus Funds were a ‘through’ target date fund . . . while American Century TDFs

come in both ‘to’ and ‘through’ varieties.” (Id. at PageID #249.)

• “Although the American Century TDFs are not passively managed like the Focus

Funds in Johnson, they were designed to meet ‘industry-recognized standards’ for

target date funds . . . and the Brookfield Plan Committee chose the S&P Target Date

Index as their benchmark.” (Id. at PageID #254.)

Applying Johnson, Plaintiff argues that “the issue is not whether American Century TDFs

generated higher returns than comparators in the short-term (1 and 3 year performance metrics), on

which Defendants focus . . . but whether such TDFs were appropriate for long-term investing for all

of Brookfield’s participant-employees.” (Id. at PageID #254–55.) Plaintiff asserts that “[i]t would

make little sense to construe the ‘meaningful benchmark’ standard to mean that any replacement fund

has to share the exact same conservative investment philosophy, as Defendants suggest they must . .

. which prudent fiduciaries could have found unsuitable for their participant population” because

“[t]he whole point of picking a new TDF to act as a default investment for the Plan is to pick a more

suitable suite of TDFs that meet the demographic needs of the Plan participant population.” (Id. at

PageID #257.)

According to Plaintiff, “[t]he evidence plausibly indicates that starting at the beginning of the

Class Period in April 2019, the American Century TDFs were not appropriate for long-term investing

and Defendants should have known that fact.” (Id. at PageID #255.) Largely reciting the allegations

in the Complaint, Plaintiff further argues that “[t]aken together, because of the underperformance and

high turnover rates for the American Century TDFs, Defendants were or should have been aware

from the beginning of the Class Period in April 2019 that the American Century TDFs were not an

22

appropriate or suitable investment for the Plan.” (Id. at PageID #256.) Plaintiff concludes that

“[b]ecause as set out in detail in the Complaint, the American Century TDFs systematically

underperformed their own benchmark, as well as all other comparable target date funds at-large and

their Morningstar category, had an alarming drop in market share, and a red flag number with regard

to the American Century TDFs turnover rate, Plaintiff has plausibly established a claim for breach of

the duty of prudence with regard to the Plan’s imprudent retention of the American Century TDFs.”

(Id. at PageID #258.)

Plaintiff also acknowledges that his “failure to monitor claim, brought against Brookfield, is

derivative of Plaintiff’s duty of prudence claim.” (Id. at PageID #259.) Because Plaintiff contends

that his duty-of-prudence claim survives dismissal, so too must his failure-to-monitor claim. (Id.)

C. Defendants’ Reply

Defendants focus their Reply on three areas. First, Defendants correctly point out that

Plaintiff did not respond to their argument concerning underperformance. (Doc. No. 20, PageID

#262–63.)

Second, Defendants contend that Johnson does not control this case. Defendants argue that

“Johnson recognized that a market index can be a meaningful benchmark when the challenged fund

is designed to replicate it through passive management.” (Id. at PageID #267.) Defendants contend

that “nothing about this observation suggests that an index is always a meaningful benchmark,

irrespective of the fund’s management style” because “Johnson repeatedly recognized that its

discussion was specific to passively managed funds and expressly contrasted why an actively

managed fund would be inappropriate to compare to an index.” (Id.) Defendants contend that

Johnson does not suggest that “this straightforward principle should be, or could be, applied where

23

the fund being compared was actively managed.” (Id.) Defendants conclude that “because he

concedes that the AmCen TDFs were not passively managed . . . Plaintiff admits that the critical

predicate in Johnson— the passive management style of the challenged funds—is absent in this case.”

(Id.)

Third, Defendants argue that “Plaintiff’s attempted comparisons to the ‘S&P Target Date

Index’ would remain unavailing because that particular index was not, in fact, the self-selected

benchmark for the AmCen TDFs.” (Id. at PageID #268.) Defendants assert that Plaintiff

“deliberately and self-consciously refuses to say where the purported benchmark allegedly was

selected.” (Id.) Defendants ask this Court to take judicial notice of a prospectus referenced in the

Complaint, demonstrating that, “each vintage of the AmCen TDFs lists the S&P Target Date ‘to’

Index for the corresponding TDF vintage. (Id. at PageID #268–69.) Defendants claim that “the S&P

Target Date ‘to’ Index for a particular year is not the “S&P Target Date Index.” (Id. at PageID #269.)

And because of this distinction, Defendants argue that Johnson is inapplicable because that case

involved a benchmark “through” target date funds. (Id.)

VI. Analysis

After reviewing the Complaint, the parties’ briefing and applicable law, the Court finds, as

explained in greater detail below, that Plaintiff’s Complaint fails to state a claim upon which relief

can granted.

A. Plaintiff has not alleged a plausible duty-of-prudence claim

As explained below, the Court finds that even if Plaintiff has sufficiently alleged comparators,

Plaintiff’s duty-of-prudence claims nonetheless fails because he has not alleged sufficient

underperformance for the Court to infer imprudence.

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1. Plaintiff has not plausibly alleged imprudence based on his comparison to

the S&P 500 Target Date Index

Because the parties’ briefing primarily focuses on Johnson’s applicability to this case, the

Court first addresses whether Plaintiff’s duty-of-prudence claim can be based upon the S&P 500

Target Date Index. As explained supra, Smith teaches that a plaintiff cannot compare an active fund

with a passive fund to demonstrate imprudence and Johnson teaches that a plaintiff can plead a duty-

of-prudence claim based upon a passive fund underperforming its own internal benchmark. What

these cases do not address is whether a plaintiff can plead a duty-of-prudence claim based upon an

active fund underperforming its own internal benchmark.8 The parties have not pointed the Court to

any authority directly answering this question. Upon review of the parties’ briefing, and applicable

Sixth Circuit law, the Court finds Smith more applicable to Plaintiff’s Complaint. Given the material

differences between active and passive funds, the Court finds that the rule in Johnson does not apply

to actively managed funds.

In an actively managed fund, “the portfolio manager actively makes investment decisions and

initiates buying and selling of securities in an effort to maximize return.” Smith, 37 F.4th at 1163.

By contrast, passively managed funds “simply track the stocks in, say, the S&P 500 or some other

stock or bond index.” Forman v. TriHealth, Inc., 40 F.4th 443, 446 (6th Cir. 2022). Johnson

recognized that “[b]ecause tracking an industry-recognized index is the ‘investment goal’ of a

passively managed target date fund such as the Focus Funds, a relevant market index is inherently a

meaningful benchmark.” Johnson, 122 F.4th at 217. Citing to Smith, the Johnson Court found that

8 The Complaint does not allege whether the American Century TDFs are actively or passively managed. Plaintiff,

however, asserts in its Opposition that “the American Century TDFs are not passively managed like the Focus Funds in

Johnson.” (Doc. No. 19, PageID #254.) Thus, by Plaintiff’s own admission, the American Century TDFs are actively

managed.

25

“[b]y definition, then, the Focus Funds share the same goals, strategies, and risks as the indices they

are designed to replicate.” Id. In a footnote, however, Johnson also recognized that “an active fund

is not trying to mimic an index, managers have more flexibility to adjust asset allocation based on

market conditions or their outlook.” Id. at 217, n.3 (citing Smith, 37 F.4th at 1163). And it would

not make sense for an actively managed fund to try to mimic an index like the S&P 500 given the

fees associated with active management. Smith, 37 F.4th at 1163 (“Little surprise, actively managed

funds, which require considerable judgment and expertise, charge more than passively managed

funds, which require little judgment and expertise”).

In this case, Plaintiff’s allegations concerning the S&P 500 Target Date Index are sparse.

Plaintiff alleges, like the plaintiff in Johnson, that “[t]he American Century TDFs were designed to

meet industry-recognized benchmarks” and “share the same goals, strategies, and risks as the indices

they are designed to replicate.” (Doc. No. 1, ¶ 21.) Plaintiff further alleges that “the American

Century TDFs materially and dramatically underperformed their own benchmarks, the S&P Target

Date Index, during the three-year period before the beginning of the Class Period in 2018.” (Id. at ¶

27.) To be sure, it is certainly possible that an actively managed fund could go against the norm and

attempt to mimic the S&P 500 Target Date Index like Plaintiff alleges here. But as in Smith, “a side-

by-side comparison of how” the American Century TDFs and the S&P 500 “performed in a narrow

window of time, with no consideration of their distinct objectives, will not tell a fiduciary which is

the more prudent long-term investment option.” Smith, 37 F.4th at 1167 (emphasis added).

Plaintiff’s bare-bones allegations do not explain why the American Century TDFs are a

unique actively managed fund that is attempting to mimic the S&P 500 Target Date Index in such a

way that the S&P 500 Target Date Index itself can be an adequate comparator. Cf. Bekker v.

26

Neuberger Berman Grp. LLC, No. 16 CV 6123-LTS-BCM, 2018 U.S. Dist. LEXIS 166690, at *17

(S.D.N.Y. Sept. 27, 2018) (“Plaintiff's allegation that the VEF, an actively-managed fund, was

benchmarked to the S&P 500, which the VIIIX, an index fund, tracked, does not demonstrate the

requisite comparability”). Accordingly, the Court finds that the S&P 500 Target Date Index cannot

serve as a meaningful comparator here. See Batt v. 3M Co., No. 25-cv-3149 (ECT/DTS), 2026 U.S.

Dist. LEXIS 48639, at *14 (D. Minn. Mar. 10, 2026) (“But that important allegation is missing here;

Plaintiffs do not claim the 3M TDF Series are designed to track the S&P Indices”); In re LinkedIn

ERISA Litig., No. 5:20-cv-05704-EJD, 2021 U.S. Dist. LEXIS 221294, at *26 (N.D. Cal. Nov. 16,

2021) (“Plaintiffs have therefore pled nothing more than the conclusory underperformance of an

actively managed fund as compared to a market index benchmark, which is insufficient on its own to

state a claim for breach of prudence”); Wehner v. Genentech, Inc., No. 20-cv-06894-WHO, 2021 U.S.

Dist. LEXIS 111341, at *25–26 (N.D. Cal. June 14, 2021) (finding “[g]eneral assertions that the

Roche TDFs, the retail TDFs, and the S&P Indices ‘all share the same overall purpose and strategy’”

insufficient “to support an apples-to-apples comparison without factual allegations that compare the

products’ styles and strategies to support a finding of ‘meaningful benchmark.’”).9

Nevertheless, Johnson’s applicability is not dispositive. Even if the S&P 500 Target Date

Index is an adequate comparator here, Plaintiff’s claim, to the extent premised upon the S&P 500

Target Date Index, fails for a separate reason. Plaintiff alleges that the American Century TDFs

9 The Court is not persuaded by Plaintiff’s citation to Fulton v. FCA US LLC, No. 24-cv-13159, 2025 U.S. Dist. LEXIS

193340 (E.D. Mich. Sept. 30, 2025) in his second Notice of Supplemental Authority. In that case, the Eastern District of

Michigan followed Johnson and held that the plaintiff could compare the funds at issue with their own internal

benchmarks. Upon the Court’s review of Fulton, the opinion, however, does not address whether the funds at issue were

passive, like in Johnson, or active, like funds at issue in this case. Because the Fulton opinion does not address how the

funds were managed, it does not guide the Court’s analysis here.

27

underperformed the S&P 500 Target Date Index “for the three-year period ending on December 31,

2018” by as little as 0.68% and as high as 1%. (Doc. No. 1, ¶ 62.) Then, according to Plaintiff, “[t]he

same pattern of underperformance . . . continued after January 1, 2019,” ranging from 0.39% to

1.67%. (Id. at ¶ 63.) Next, Plaintiff alleges that “the underperformance of the American Century

TDFs has become more severe since 2021,” ranging from 0.57% to 2.80%. (Id. at ¶ 64.) During the

same period, Plaintiff does not assert that the American Century TDFs failed to make positive returns.

In fact, Plaintiff pleads the opposite. (Id. at ¶¶ 66 (listing charts showing positive performance for

American Century TDFs during the “three-year performance before 12/31/2018,” “performance since

1/1/2019,” and “performance since 1/1/2021”).)

Given that the American Century TDFs had positive returns, and only slightly

underperformed the S&P 500 Target Date Index, the Court finds that Plaintiff has not alleged

sufficient facts to infer imprudence. In Smith, the Sixth Circuit recognized that:

Merely pointing to another investment that has performed better in a five-year

snapshot of the lifespan of a fund that is supposed to grow for fifty years does not

suffice to plausibly plead an imprudent decision—largely a process-based

inquiry—that breaches a fiduciary duty. Precipitously selling a well-constructed

portfolio in response to disappointing short-term losses, as it happens, is one of the

surest ways to frustrate the long-term growth of a retirement plan. See Ellis, supra,

at 83-87, 119. Any other rule would mean that every actively managed fund with

below-average results over the most recent five-year period would create a

plausible ERISA violation. Unless and until it becomes feasible to have all actively

managed funds perform above average, that would lead to the disappearance of this

option in ERISA plans.

Smith, 37 F.4th at 1166. Consistent with Smith, this Court has previously explained that:

“allegations of consistent, ten-year underperformance may support a duty of

prudence claim.” Patterson v. Stanley, No. 16-cv-6568 (RJS), 2019 WL 4934834,

at *10 (S.D.N.Y. Oct. 7, 2019). However, “the underperformance must be

substantial.” Id. To illustrate, in Patterson, the plaintiffs alleged that the challenged

fund had an average annual return of 7.42%, while its benchmark had an average

annual return of 8.16% over the same ten-year period. Id. The court held that “such

28

a small disparity in performance relative to its benchmark does not support the

inference that Defendants were imprudent to retain the Mid Cap Fund in the set of

Plan offerings.” Id. Similarly, in Birse, the plaintiffs alleged that the challenged

fund underperformed its benchmark by an average of 2.11% for six years, and that

had the defendant replaced the fund with another, class members would have

realized 5% higher returns on their investment. 2019 WL 1292861, at *5. The court

dismissed the plaintiffs’ claim for breach of the fiduciary duty of prudence, holding

the plaintiffs “improperly rel[ied] on hindsight to allege [the defendant] should have

offered a better performing fund rather than indicating how an investigation would

show an improvident process.” Id. The court also noted that the plaintiffs “cite[d]

allegedly similar cases that have survived dismissal, but Plaintiffs fail[ed] to

explain that the complaints at issue in those cases contained very different

allegations and involved funds that performed much lower than the Fund’s 2-3%

underperformance.” Id. at *5 n.2.

Stark, 2021 U.S. Dist. LEXIS 84813 at *35–36.

Accordingly, courts throughout the country have found that underperforming by only one,

two or even three percentage points is insufficient to infer imprudence at the pleading stage. See,

e.g., Entrom v. SAS Inst., No. 5:24-CV-105-D, 2025 U.S. Dist. LEXIS 37602, at *12–13 (E.D.N.C.

Mar. 3, 2025) (finding plaintiffs did not plausibly plead underperformance when “[t]he JPM funds

generally provided returns within one-to-two percentage points of plaintiffs’ handpicked comparator

funds”); Gonzalez v. Northwell Health, Inc., No. 20-CV-3256 (RPK) (RLM), 2024 U.S. Dist. LEXIS

251257, at *25–29 (E.D.N.Y. Mar. 26, 2024) (underperformance ranging from 0.43% to 2.99%

insufficient to infer imprudence); Ruilova v. Yale-New Haven Hosp., Inc., No. 3:22-cv-00111-MPS,

2023 U.S. Dist. LEXIS 33791, at *53 (D. Conn. Mar. 1, 2023) (underperformance ranging from “less

than 1%” to 3.63% insufficient to infer imprudence); Young Cho v. Prudential Ins. Co. of Am., No.

19-19886 (JMV) (SCM), 2021 U.S. Dist. LEXIS 185397, at *29 (D.N.J. Sept. 21, 2021) (“More

importantly, Plaintiff has not alleged that the underperformance was sufficiently substantial: The

Prudential Retirement Real Estate Fund in its five-year trailing performance had underperformance

percentages ranging from .07% to 3.71% (and this was an outlier with the next highest being 1.08%),

29

and its ten-year trailing performance reflected underperformance ranging from 1.19% to 2.86%; The

Prudential High Yield Collective Investment Trust in its five-year trailing performance had

underperformance percentages ranging from .05% to 1.06%; and The Wellington Trust Company

CIF II Diversified Inflation Hedges Portfolio in its five-year trailing performance had

underperformance percentages ranging from .22% to 1.07%.”).

Applying these cases here, Plaintiff has not alleged sufficient underperformance to infer

imprudence. From 2016 to 2018, the American Century TDFs underperformed the S&P 500, at worst,

by 1.00%. (Doc. No. 1, ¶ 62.) Then, in 2019, the American Century TDFs underperformed the S&P

500, at worst, by 1.67%. (Id. at ¶ 63.) After 2021, the American Century TDFs underperformed the

S&P 500, at worst, by 2.80%. (Id. at ¶ 64.) Thus, even assuming that Plaintiff is correct (as the Court

must do at the pleading stage) that the American Century TDFs set the S&P 500 Target Date Index

as it owns benchmark, such modest underperformance is insufficient to infer imprudence. Compare

with Kistler v. Stanley Black & Decker, Inc., No. 3:22-cv-966 (SRU), 2024 U.S. Dist. LEXIS 117419,

at *32–33 (D. Conn. July 3, 2024) (eleven instances of underperformance of more than 3% and

cumulative underperformance of 9.08% and 11.90% sufficient to infer imprudence); Jacobs v.

Verizon Communs., Inc., No. 16 Civ. 1082 (PGG), 2017 U.S. Dist. LEXIS 162703, at *24–27

(S.D.N.Y. Sept. 28, 2017) (allegations of ten-year annualized underperformance of 8.63% sufficient

to state a claim).

Johnson does not mandate a different outcome even if the S&P 500 Target Date Index is an

adequate comparator. In stark contrast to the allegations here, the Johnson Court relied on the

allegation that “[f]rom 2014 on, the Focus Funds continued to ‘substantially underperform’ the S&P

target date fund benchmark as well as other target date funds.” Johnson, 122 F.4th at 211 (emphasis

30

added). In finding that the amended complaint stated a claim, the Johnson court found that the funds

“systematically underperformed” the S&P 500 benchmark. Id. at 218 (emphasis added). While

Plaintiff alleges here that the American Century TDFs “materially” and “dramatically”

underperformed their own benchmarks,” the data he provides in the Complaint tells a different story.

Put simply, the allegations here do not show that the American Century TDFs “substantially” or

“systematically” underperformed S&P 500 Target Date Index.10

Accordingly, the Court finds that Plaintiff has not alleged a plausible duty-of-prudence claim

based on his allegations comparing the American Century TDFs to the S&P 500 Target Date Index.

2. Plaintiff has not plausibly alleged imprudence based on his comparison to

the Morningstar Comparators

Plaintiff’s allegations concerning the Morningstar Comparators are more robust than his

allegations concerning the S&P 500. Plaintiff alleges: (1) [t]he Morningstar Comparator Funds are

grouped in the same Morningstar Category as the American Century Target Date Series;” (2) “[a]

closer look at the American Century Target Date Series and Morningstar Comparator Funds further

demonstrate[s] they had similar underlying investments and strategies;” (3) “[t]he American Century

Target Date Series and each of the Morningstar Comparator Funds are Large Cap Blend series,

meaning their underlying holdings are a combination of active and passive investments;” and (4)

10 The Court rests its interpretation of Johnson on the Sixth Circuit’s opinion alone. Independent of the Johnson opinion,

the Court also takes judicial notice of the allegations in the amended complaint filed in Johnson because the existence of

allegations themselves is not subject to dispute. Scotty’s Conrt. & Stone v. United States, 326 F.3d 785, n.1 (6th Cir.

2003) (“We take judicial notice of this page of a brief submitted as part of the proceedings in a different case”). Although

not addressed in the Johnson opinion, the Court notes that the underperformance alleged in Johnson was far more severe

than what is alleged here. See Johnson v. Parker-Hannafin Corporation, No. 1:21-cv-00256-BMB, Doc. No. 20 at ¶¶

69, 93–94 (alleging underperformance ranging from 4%–17% when compared to other TDFs, and underperformance

ranging from less than 1% to almost 10% when compared to the S&P 500 benchmark).

31

“[t]he American Century Target Date Series and all of the Morningstar Comparator Funds have a

‘through’ glidepath.” (Doc. No. 1, ¶¶ 80–82, 85.)

Defendants’ problem with Plaintiff’s comparison to the Morningstar Comparator Funds is that

“a shared Morningstar label does not make one fund a meaningful benchmark for another.” (Doc.

No. 18-1, PageID #138–39.) Defendants reach this conclusion by citing Matousek v. MidAmerican

Energy Co., 51 F.4th 274, 281 (8th Cir. 2022). There, the plaintiff compared the funds at issue to

their “peer groups.” Id. at 281. The Eighth Circuit found that the plaintiff could not rely on general

comparisons to a peer group when there was “no explanation of what types of funds are in each group,

much less the criteria used to sort them.” Id. The Matousek Court found that the plaintiff did not

provide information concerning “whether [the peer group funds] hold similar securities, have similar

investment strategies, and reflect a similar risk profile.” Id.; see also Batt, 2026 U.S. Dist. LEXIS

48639 at *22 (“the fact that Morningstar categorized the 3M TDF Series together with the comparator

TDF series does not plausibly show what the meaningful-benchmark standard requires”).

But Plaintiff here alleges more than just a generic comparison to a Morningstar category like

the plaintiff did in Matousek. In addition to sharing the same Morningstar category, Plaintiff alleges

American Century TDFs and Morningstar Comparator Funds “had similar underlying investments

and strategies,” “are Large Cap Blend series, meaning their underlying holdings are a combination of

active and passive investments,” and “have a ‘through’ glidepath.” (Doc. No. 1, ¶¶ 80–82, 85.)

The parties have not provided caselaw directly on point addressing whether these allegations

are sufficient to state a claim. Upon the Court’s own research, caselaw is not uniform. Some courts,

including those within this Circuit, have found that allegations like Plaintiff’s here are sufficient to

state a claim. Parker v. GKN N. Am. Servs., No. 21-12468, 2022 U.S. Dist. LEXIS 154358, at *11

32

(E.D. Mich. Aug. 26, 2022) (denying motion to dismiss based on comparison to funds listed in the

same Morningstar category because “these categories function as comparators in areas that include

the potential risks and rewards of the fund”); Dover v. Yanfeng US Auto. Interior Sys. I LLC, 563 F.

Supp. 3d 678, 688 (E.D. Mich. 2021) (“While it would have been preferrable for Plaintiffs to provide

more detailed information as to why the specific Morningstar indexes listed are, in fact, accurate

comparators, parties in similar ERISA actions routinely reference these indexes, or expert testimony

that cites these indexes, to allege a breach of duty”).11 But other courts have reached the opposite

conclusion. See Batt, 2026 U.S. Dist. LEXIS 48639, at *22 (“Without more, the fact that Morningstar

categorized the 3M TDF Series together with the comparator TDF series does not plausibly show

what the meaningful-benchmark standard requires”); Maclas v. Sisters of Charity of Leavenworth

Health Sys., No. 23-cv-01496-LTB-SBP, 2025 U.S. Dist. LEXIS 273302, at *15–16 (D. Colo. Jan.

6, 2025) (complaint failed to state a claim despite the plaintiff alleging that the comparator funds

were “in the same Morningstar category,” “that the underlying holdings for all funds in the

Comparator Index ‘match the risk return profile for this category’”; that “the JPM TDFs and the

Comparator Funds all ‘concentrate their holdings in the large blend risk/return category;’ and that

“the JPM TDFs and the Comparator Funds are all ‘through’ target date funds”). Based upon its

review of this case law, this Court finds that the Morningstar Comparator Funds are adequate

comparators.

11 See also Gaines v. BDO USA, LLC, 663 F. Supp. 3d 821, 829 (N.D. Ill. Mar. 21, 2023) (denying motion to dismiss

based on allegations that the funds at issue “substantially underperformed their respective Morningstar fund categories”

and that “each fund in the same category ‘share[s] core similarities.’”); Moler v. Univ. of Md. Med. Sys., No. 1:21-cv-

01824-JRR, 2022 U.S. Dist. LEXIS 124804, at *10, n.7 (D. Md. July 13, 2022) (“Plaintiffs have provided comparator

funds in the same Morningstar category that use the same benchmark market index as the funds at issue. The court is

satisfied that the requirement of a meaningful benchmark has been met at the motion to dismiss stage”); Synder v.

UnitedHealth Grp., Inc., No. 21-1049 (JRT/BRT), 2021 U.S. Dist. LEXIS 230878, at *12 (D. Minn. Dec. 2, 2021) (“the

Morningstar Comparators constitute meaningful benchmarks because they fall within the same universe, and incorporate

similar purposes, asset allocations, and risk exposure as the Wells Fargo TDFs”).

33

But even if the Morningstar Comparator Funds are adequate comparators, Plaintiff’s claim

fails because he has not alleged meaningful underperformance. For each of the American Century

TDFs, Plaintiff provides charts detailing the one-, three- and five-year returns when compared to the

Morningstar Comparator Funds and “their Morningstar benchmarks.” (Doc. No. 1, ¶¶ 90, 92, 96.)

The Court has reviewed these charts and notes that the American Century TDFs did outperform the

Morningstar Comparators and “their Morningstar benchmarks” in certain instances. (See id.)

Excluding those instances, Plaintiff’s best case for underperformance is his data concerning

the one-year returns. (Doc. No. 1, ¶ 96, Appendix A.) Based on that data, Plaintiff alleges

underperformance of up to 7.66%, which is near the range of plausible imprudence. Kistler, 2024

U.S. Dist. LEXIS 117419 at *32–33; Jacobs, 2017 U.S. Dist. LEXIS 162703 at *24–27. This data,

however, is based on four nonconsecutive years: 2019, 2021, 2023 and 2024. Such a small window

of time cannot plausibly establish imprudence. Smith, 37 F.4th at 1166 (“Merely pointing to another

investment that has performed better in a five-year snapshot of the lifespan of a fund that is supposed

to grow for fifty years does not suffice to plausibly plead an imprudent decision”).

When looking at the larger data sets, the three- and five-year data do not show material

underperformance. For example, based on the three-year annualized performance data alleged in the

Complaint, the range of outperformance generally was between less than 1% and 3%, and never

exceeding 4%. (Doc. No. 1, ¶ 90; Appendix A.) The data is even less compelling for the five-year

annualized performance data alleged in the Complaint. (Doc. No. 1, ¶ 92; Appendix B.) The range

of outperformance was generally between less than 1% and 2%. There were only two instances of

outperformance of an amount higher than 3% based on the five-year data.12

12 The American Century Retirement 2035 Trust Class XI and the American Century Retirement 2040 Trust Class XI

were outperformed by, at most, 3.21% and 3.18% respectively from January 1, 2017 through December 31, 2021.

34

Simply put, “allegations that the [American Century TDFs] typically, if modestly,

underperformed relative to the [Morningstar Comparators] for a limited number of years are not

enough to carry plaintiffs’ claims of breach of defendants’ fiduciary duties past the pleading

threshold.” Abel v. CMFG Life Ins. Co., No. 22-cv-449-wmc, 2024 U.S. Dist. LEXIS 14535, at *15–

16 (W.D. Wisc. Jan. 26, 2024) (relying on Smith to conclude that allegations of underperformance

“ranging from 0.2% to around 5%, with the average underperformance being between 1 and 3%”

insufficient to infer imprudence); compare with Karpik v. Huntington Bancshares, Inc., No. 2:27-cv-

1153, 2019 U.S. Dist. LEXIS 224264, at *14 (S.D. Ohio Sept. 26, 2019) (denying motion to dismiss

duty-of-prudence claim based upon allegations that the fund “dramatically underperformed the

market” and “was ranked last by Morningstar out of 927 funds”). Plaintiff’s allegations establish that

the American Century TDFs performed slightly worse than some of their peer funds from 2017

through 2024.13 Accordingly, even though this Court has concluded that the Morningstar

Comparators are adequate comparators, the American Century TDFs modest underperformance is

insufficient to infer imprudence. Entrom, 2025 U.S. Dist. LEXIS 37602 at *12–13; Abel, 2024 U.S.

Dist. LEXIS 14535 at *15–16; Gonzalez, 2024 U.S. Dist. LEXIS 251257 at *25–29; Ruilova, 2023

U.S. Dist. LEXIS 33791 at *53.14

13 In fact, another Court has observed that “the American Century TDFs yielded positive returns and outperformed the

median TDF in their Morningstar peer group with significant frequency” between 2016 and 2023. Phillips v. Cobham

Advanced Elec. Sols., Inc., No. 23-cv-03785-EKL, 2025 U.S. Dist. LEXIS 184960, at *14–16, 25–26 (N.D. Cal. Sept.

19, 2025).

14 Plaintiff’s citation to McGeathy v. Reinalt-Thomas Corp., No. CV-25-01439-PHX-DLR, 2026 U.S. Dist. LEXIS 45208

(D. Ariz. Mar. 4, 2026) does not warrant a different conclusion. That Court did find that the plaintiff alleged meaningful

benchmarks and underperformance relative to American Century TDFs. Id. at *10. But that court provided no analysis

as to why the underperformance was sufficiently alleged. Given the weight of authority concerning the allegations

necessary to plead underperformance, the Court does not find McGeathy persuasive. Compare with Phillips, 2025 U.S.

Dist. LEXIS 184960 at *16–17 (“Plaintiffs’ allegations comparing the American Century TDFs to the Morningstar peer

group do not support an inference that the Committee breached its duty of prudence”).

35

3. Plaintiff has not plausibly alleged imprudence based on his comparison to

the Large TDF Comparator Funds

For similar reasons, the Court finds that Plaintiff cannot base his duty-of-prudence claim

based on the alleged comparison between the American Century TDFs and the LargeTDF

Comparator Funds. Plaintiff’s allegations concerning the LargeTDF Comparator Funds are primarily

set forth in one paragraph. (Doc. No. 1, ¶ 67 (“All of the Large TDF Comparator Funds had similar

structure, objectives, strategy, and risk profile to the American Century TDFs, and all were designed

to provide essentially the same type of investment experience to plan participants: ‘a long-term

investment strategy based on holding a mix of stocks, bonds and other investments (this mix is called

an asset allocation) that automatically changes over time as the participant ages.’”).) There is case

law suggesting that these barebones allegations are insufficient. Compare Hall v. Cap. One Fin.

Corp., No. 22-cv-00857, 2023 U.S. Dist. LEXIS 35391, at *21 (E.D. Va. Mar. 1, 2023) (“the

Amended Complaint remains silent on whether the Comparator TDFs use ‘through’ or ‘to’ retirement

glidepaths; whether the Comparator TDFs invest only in actively-managed or passively-managed

funds; or how the Comparator TDFs’ underlying equity and bond funds are allocated among the types

and categories of possible equity and bond funds. In short, the Amended Complaint makes no factual

allegations demonstrating that the Comparator TDFs are meaningful comparators to the BlackRock

TDFs”); with Fulton, 2025 U.S. Dist. LEXIS 193340 at *21–22 (“The Court is less certain, however,

that the five Comparator Funds are useful measures of the FCA TDFs’ performance given their

distinct goals and strategies. But the Court finds that whether the Comparator TDFs are similar, and

whether the FCA TDFs performed significantly worse, is best left for resolution at summary judgment

or by a factfinder at trial”).

Even assuming these allegations are sufficient to establish that the LargeTDF Comparator

36

Funds are adequate comparators, Plaintiff has failed to allege sufficient underperformance to infer

imprudence. Plaintiff alleges that “the American Century TDFs have also underperformed compared

to the Large TDF Comparator Funds during the three-year period ending December 31, 2018, and

since 2019 and 2021.” (Doc. No. 1, ¶ 66.) But Plaintiff has not alleged meaningful

underperformance. According to Plaintiff, the American Century TDFs underperformed the Large

TDF Comparators, at worst, (1) by only 1.59% to 2.36% during the three-year period preceding

December 31, 2018; (2) by only 1.19% to 2.77% since January 1, 2019; and (3) by 0.89% to 2.73%

since January 1, 2021. (Id.) Further, in some instances, the American Century TDFs outperformed

the Large TDF Comparators. Id. Again, for the same reasons addressed at length above, such modest

underperformance is insufficient to infer imprudence. See, e.g., Entrom, 2025 U.S. Dist. LEXIS

37602 at *12–13; Abel, 2024 U.S. Dist. LEXIS 14535 at *15–16; Gonzalez, 2024 U.S. Dist. LEXIS

251257 at *25–29; Ruilova, 2023 U.S. Dist. LEXIS 33791 at *53. Accordingly, even if the LargeTDF

Comparator Funds are adequate comparators, the American Century TDFs modest underperformance

is insufficient to infer imprudence.

4. Plaintiff has not sufficiently alleged imprudence based upon the American

Century TDFs alleged turnover rates

Having found that Plaintiff has not alleged sufficient underperformance to infer imprudence,

the Court finally assesses whether Plaintiff’s Complaint infers imprudence based upon the American

Century TDFs alleged turnover rates. Plaintiff only points the Court to Johnson to support his

argument that high turnover rates can infer imprudence. Johnson, however, is distinguishable. As

the majority in Johnson recognized, the plaintiff did “not rely only on an allegation that past

turnover on its own would compel a prudent administrator to replace the Focus Funds, but rather

asserts that turnover (even historical turnover) would, when combined with the rest of the Funds’

37

flaws, compel an administrator acting pursuant to a prudent process to replace the Funds.” Johnson,

122 F.4th at 215. The Johnson majority thus undertook to answer “whether Johnson’s allegations of

high turnover rate and underperformance, taken together, sufficiently state a claim for imprudence

under ERISA.” Id. at 216 (emphasis added). The Court answered that question in the affirmative:

“[a] jury could plausibly find that a prudent decision-making process would have considered the

Funds’ turnover and underperformance and would have arrived at the conclusion that retaining the

funds would not be in the Plan’s best interests.” Id. at 220. Therefore, Johnson stands for the

proposition that underperformance and high turnover rates can sometimes infer imprudence. See id.

at 220.

But, as explained above, Plaintiff has not sufficiently alleged underperformance. Plaintiff has

not cited any authority that holds that a high turnover rate, standing alone, is sufficient to infer

imprudence. And the Court could not find any. Furthermore, the turnover rates alleged here (68%

to 72%) are not nearly as high as the 90% turnover rate alleged in Johnson. See Johnson, 122 F.4th

at 219, n.7. Indeed, this high turnover appears to not have had much of a meaningful effect, if any,

on the performance of the American Century TDFs. As explained above, the American Century

TDFs, at times, marginally underperformed some of its alleged comparators by less than 1%, and

even outperformed their alleged comparators. (See Doc. No. 1, ¶¶ 90, 92, 96; see also Appendix A,

B & C.) The high turnover rate and “the different performance rates between the funds may be

explained by a ‘different investment strategy,’” and not necessarily imprudence. Smith, 37 F.4th at

1167 (quoting Meiners v. Wells Fargo & Co., 898, F.3d 820, 822–23 (8th Cir. 2018)). For that reason,

the Court finds that Plaintiff has not plausibly alleged imprudence based upon the alleged high

38

turnover rates.15

In sum, the Court concludes that Plaintiff has not alleged plausible imprudence based upon

his allegations of underperformance and high turnover rates. The Court therefore dismisses Plaintiff’s

duty-of-prudence claim.16

B. Because Plaintiff’s duty-of-prudence claim fails to state a claim, his failure to

monitor claim also fails to state a claim

The parties agree that Plaintiff’s failure-to-monitor claim is dependent upon the success of his

duty-of-prudence claim. Accordingly, Plaintiff’s failure-to-monitor claim is also dismissed for

failure to state a claim. See, e.g., England v. Denso Int’l Am., Inc., No. 22-11129, 2023 U.S. Dist.

LEXIS 131386, at *27–28 (E.D. Mich. July 28, 2023) (“Plaintiffs have failed to state plausible claims

for breach of the duty of prudence, and, therefore, the Court dismisses their claims for breach of the

duty to monitor”); Saumer v. Cliffs Natural Res. Inc., No. 1:15-cv-954-DAP, 2016 U.S. Dist. LEXIS

185459, at *27 (N.D. Ohio Apr. 1, 2016) (“at least one circuit—as well as district courts in the Sixth

Circuit—have held that a failure to monitor claim does not survive absent a predicate breach of

fiduciary duty by a monitored fiduciary”), aff’d 853 F.3d 855 (6th Cir. 2017).

15 Plaintiff’s allegations are distinguishable from the allegations in Doll v. Energy, Inc., No. 25-00043-CV-W-SRB, 2025

U.S. Dist. LEXIS 271639 (M.D. Wo. Sept. 10, 2025), which Plaintiff cites in his first Notice of Supplemental Authority.

There, the plaintiff also alleged that the American Century TDFs were an imprudent investment. While the Doll Court

found that the plaintiff stated a claim, that decision was based on facts not alleged here. Specifically, the plan “engaged

in a least five major Plan fiduciary process errors” that deviated from the Plan’s IPSs. The Doll Court concluded that

“Plaintiffs’ significant allegations of wrongdoing are sufficient to plead a breach of duty of prudence claim.” Id. at *11–

12. It based this conclusion on the fact that “Plaintiffs here allege that American Century TDFs underperformed

comparable TDFs and specific incidences where Defendants failed to evaluate and monitor the American Century TDFs

in accordance with their guidelines.” Id. at *11 (emphasis in original).

16 The Court declines Plaintiff’s request “that the Court permit the same limited discovery here if it concludes that Plaintiff

has not met his pleading burden.” (Doc. no. 19, PageID #248.) Plaintiff’s requested discovery would be limited to “any

Plan investment policy statements (IPSs) and Plan Committee minutes and materials discussing the American Century

TDFs performance and decision to retain those TDFs during the Class Period.” (Id.) Such discovery would be

unnecessary as it would not change the fact that the American Century TDFs did not materially underperform.

39

VII. Conclusion

For the reasons set forth herein, Defendants’ Motion to Dismiss (Doc. No. 18) is GRANTED.

IT IS SO ORDERED.

s/Pamela A. Barker

PAMELA A. BARKER

Date: March 26, 2026 U. S. DISTRICT JUDGE

40

APPENDIX A

ONE-YEAR RETURN (CUMULATIVE)

1/1/2019 – 1/1/2021 – 1/1/2023 – 1/1/2024 –

12/31/2019 12/31/2021 12/31/2023 12/31-2024

American

Century

1.18%–3.08% 0.48%–6.13% 0.68%–4.00% 0.07%–2.43%

Retirement 2030

Trust Class XI

American

Century

2.39%–3.71% 1.18%-6.43% 1.30%-4.89% 0.82%–3.69%

Retirement 2035

Trust Class XI

American

Century

2.2%–3.32% 2.1%–7.66% 1.94%–5.36% 1.50%–4.59%

Retirement 2040

Trust Class XI

American

Century

1.45%–2.78% 2.82%–7.45% 2.25%–5.69% 1.78%–4.09%

Retirement 2045

Trust Class XI

American

Century

0.16%–1.75% 2.32%–6.63% 1.89%–5.35% 1.35%–3.44%

Retirement 2050

Trust Class XI

American

Century

0.09%–1.4% 1.76%–6.35% 1.3%–5.14% 0.50%–2.83%

Retirement 2055

Trust Class XI

American

Century

0.11%–1.25% 1.17%–6.44% 1.01%–4.89% 0.64%–2.53%

Retirement 2060

Trust Class XI

American

Century

N/A 0.89%–6.52% 0.69%–4.97% 0.43%–2.49%

Retirement 2065

Trust Class XI

APPENDIX B

THREE-YEAR RETURN (ANNUALIZED)

1/1/2017 – 1/1/2019 – 1/1/2021 – 1/1/2022 –

12/31/2019 12/31/2021 12/31/2023 12/31-2024

American

Century

1.13%–2.62% 1.17%–3.32% 0.35%–2.56% 0.30%–1.55%

Retirement 2030

Trust Class XI

American

Century

1.03%–3.03% 1.18%–3.33% 0.80%–2.93% 1.03%–2.16%

Retirement 2035

Trust Class XI

American

Century

0.38%–2.82% 0.96%–3.42% 0.88%–3.82% 0.39%–2.77%

Retirement 2040

Trust Class XI

American

Century

0.71%–2.34% 0.24%–2.90% 1.35%–3.88% 0.91%–2.80%

Retirement 2045

Trust Class XI

American

Century

0.18%–1.68% 0.58%–1.77% 1.24%–3.64% 0.92%–2.67%

Retirement 2050

Trust Class XI

American

Century

0.07%–1.77% 0.25%–1.41% 0.94%–3.41% 0.56%–2.36%

Retirement 2055

Trust Class XI

American

Century

0.12%–1.55% 0.03%–1.18% 0.70%–3.48% 0.33%–2.32%

Retirement 2060

Trust Class XI

American

Century

N/A N/A 0.59%–3.68% 0.14%–2.49%

Retirement 2065

Trust Class XI

APPENDIX C

FIVE-YEAR RETURN (ANNUALIZED)

1/1/2015 – 1/1/2017 – 1/1/2019 – 1/1/2020 –

12/31/2019 12/31/2021 12/31/2023 12/31-2024

American

Century

1.01%–1.98% 1.07%–2.64% 0.87%–2.31% 0.69%–2.18%

Retirement 2030

Trust Class XI

American

Century

1.13%–2.30% 1.09%–3.21% 0.19%–2.29% 1.05%–2.31%

Retirement 2035

Trust Class XI

American

Century

1.79%–2.16% 1.22%–3.18% 1.54%–2.39% 1.50%–2.73%

Retirement 2040

Trust Class XI

American

Century

0.67%–1.86% 0.28%–2.60% 0.36%–2.06% 0.38%–2.40%

Retirement 2045

Trust Class XI

American

Century

0.31%–1.62% 0.56%–1.99% 0.95%–1.37% 0.71%–1.96%

Retirement 2050

Trust Class XI

American

Century

0.12%–1.47% 0.27%–1.69% 0.61%–1.13% 0.71%–1.74%

Retirement 2055

Trust Class XI

American

Century

N/A 0.07%–1.40% 0.54%–1.06% 0.79%–1.69%

Retirement 2060

Trust Class XI