TEDFORD

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

HOLLIS TEDFORD, individually and on

behalf of all others similarly situated,

Plaintiff,

Civil Action No. 25-cv-2180

v.

OPINION

EQUITABLE FINANCIAL LIFE

INSURANCE COMPANY, THE BENEFITS May 19, 2026

ADMINISTRATIVE COMMITTEE FOR

THE EQUITABLE 401(k) PLAN, and THE

INVESTMENT COMMITTEE FOR THE

EQUITABLE 401(k) PLAN,

Defendants.

SEMPER, District Judge.

THIS MATTER comes before the Court upon the Motion to Dismiss filed by Equitable

Financial Life Insurance Company (“Equitable”), the Benefits Administrative Committee for the

Equitable 401(k) Plan (“Administrative Committee”), and the Investment Committee for the

Equitable 401(k) Plan (“Investment Committee”) (collectively, “Defendants”). (ECF 15,

“Motion” or “Defs.’ Mot.”) Defendants seek dismissal of the First Amended Complaint (ECF 14,

“First Amended Complaint” or “FAC”) filed by Hollis Tedford (“Plaintiff”) asserting three counts

under the Employee Retirement Income Security Act of 1974 (“ERISA”). Plaintiff claims

Defendants are liable for (1) breaches of the fiduciary duty of prudence under 29 U.S.C. § 1104(a)

(Count I); (2) failure to adequately monitor other fiduciaries under 29 U.S.C. § 1104(a) (Count II);

and (3) prohibited transactions under 29 U.S.C. § 1106(a)(1). For the reasons stated below,

Defendants’ Motion to Dismiss is GRANTED and Plaintiff’s First Amended Complaint is

DISMISSED without prejudice in its entirety.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY1

The present dispute is brought by Hollis Tedford, a resident of Falmouth, Maine, who

participated in the Equitable 401(k) plan (the “Plan”) during the course of his employment. (FAC

¶ 29.) He purports to bring this suit on behalf of a class of likely situated individuals against the

Plan’s fiduciaries. (Id. ¶ 1.)

The Plan is a defined contribution retirement plan, established pursuant to 29 U.S.C. §§

1002(2)(A) and 1002(34) of ERISA. (Id. ¶ 2.) The Plan enables individuals to make tax-deferred

contributions from their salaries to the Plan. (Id.) At all times during the putative Class Period

from approximately 2019 to 2023, the plan had over $2 billion in assets under management. (Id.

¶¶ 11, 12, 59.) The significant value of the Plan’s assets makes it one of the largest plans in the

United States.2 (Id. ¶ 13.) Additionally, the Plan “is also large in terms of the number of

participants” because “[f]rom 2019 to 2023 it had over 12,000 participants with account balances,

1 The facts and procedural history are derived from the First Amended Complaint (ECF 14), the

briefs filed by the parties (ECF Nos. 15, 20, and 22), and the accompanying exhibits and

declarations. The Amicus Brief filed by Stable Value Investment Association offered context

regarding the complex facts alleged in this matter. (ECF 19-1.) When considering a motion to

dismiss under Rule 12(b)(6), the Court is obligated to accept as true allegations in the complaint

and all reasonable inferences that can be drawn therefrom. See Rocks v. City of Phila., 868 F.2d

644, 645 (3d Cir. 1989). The Court also considers any “document integral to or explicitly relied

upon in the complaint.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.

1997).

2 Plaintiff alleges that “[i]n 2021, only 0.2 percent (1,011 of 641,747) of plans in the country had

more than $1 billion in assets under management. In addition, this was true at the start of the

[putative] Class Period in 2019 where only 0.1 percent (776 of 603,217) of 401(k) plans in the

country were as large as the Plan.” (See FAC ¶ 13.)

with a high of 15,877 participants in 2020 … only 0.1 percent (844 of 641,747) of 401(k) plans in

the country were as large as the plan [in 2021.]” (Id. ¶ 15.) Plaintiff alleges that the significant

size of the Plan renders it a “jumbo plan” in the contributory investment plan marketplace, and

“the Plan had substantial bargaining power regarding the fees and expenses that were charged

against participant’s investments.” (Id. ¶ 6.)

Plaintiff alleges that Defendants breached their fiduciary duty of prudence “by selecting

and/or maintaining certain guaranteed investment contracts (‘GICs’) in the Plan with lower credit

ratings when compared to similar or identical investments.” (Id. ¶ 19.) Plaintiff specifically takes

issue with the choice to invest in the Equitable Fixed Income Fund (“Equitable Fund”). (Id. ¶ 20.)

This fund has investments in nine synthetic GICs offered by several large American banks and

insurance companies. (Id. ¶ 57.) Plaintiff argues this fund led to “significantly lower rates of

return” and a “prudent beneficiary would not have included this underperforming investment

option that also carried significantly more risk than other investment options that had similar goals,

i.e., the preservation of assets.” (Id. ¶¶ 20, 21.)

The Equitable Fund is a stable value investment fund that has been available to Plan

participants since 1992. (Defs.’ Mot. at 3.) Stable value investments are intended to preserve

principal and provide bond-like returns to investors. (ECF 19-1, “Stable Value Investment

Association Amicus Brief” or “SVIA Br.” at 12; Defs.’ Mot. at 4 n.2.) These funds provide a rate

of return known as a “crediting rate.” (FAC ¶ 76; Defs.’ Mot. at 4.) Stable value investments

come in several different forms, including “‘synthetic’ stable value funds where the principal is

guaranteed by multiple ‘wrap providers’ and the fund owns the assets of the underlying funds.”

(FAC ¶ 77.) Synthetic funds can be further distinguished into different subdivisions including

individually managed accounts and pooled stable value investments. (SVIA Br. at 14.) In addition

to synthetic funds, GICs can come in the form of “general account products” and “separate account

products” which have different risk projections based on the extent to which the investments are

subject to collection by creditors. (Defs.’ Mot. at 4.) These different categories have “distinctive

structure[s] that may cause them to be better suited for a particular plan and its participants.”

(SVIA Br. at 14.) Furthermore, “[e]ven within each category, the options vary widely with respect

to key characteristics” including crediting rates and fee structures. (Id. at 14-16.) The differences

between stable value funds allow for investors to make “intentional trade-off[s] for specific

strategic reasons” to benefit the specific goals and values of plan participants. (Id. at 16.) These

goals can vary, such as guaranteeing a strict rate of return or producing maximum liquidity or

transparency into assets and fee structures. (Id.)

Defendants entered into a contract with Alight Financial Solutions, LLC (“Alight”) to

provide recordkeeping services for the Plan. (FAC ¶ 18.) The two kinds of “essential”

recordkeeping services required for large Plans are “Bundled” services which provide a “suite of

essential recordkeeping services”3 and “A La Carte” services, which have “additional fees based

on the conduct of individual participants and the usage of the services by individual participants.”4

(Id. ¶¶ 96-98.) Plaintiff alleges Alight received “millions of dollars in indirect compensation from

3 “Bundled” services include: Basic account recordkeeping (e.g., demographic, source, investment

and vesting records); Multi-channel participant and plan sponsor access (e.g., phone, web); Daily

participant transaction accounting (e.g., purchases, redemptions, exchanges; Payroll service (e.g.,

hardships, in-service withdrawals, termination distributions); Participant tax reporting services

(e.g., IRS Form 1099 R); Participant confirmations, statements, and standard notices; Plan-level

reporting and annual financial package (excluding IRS Form 5500); Participant education (e.g.,

newsletters, web articles, standard communication materials); Plan consulting (e.g., preapproved

document services, operational materials); and Plan consulting (e.g., preapproved document

services, operational compliance support). (FAC ¶ 96.)

4 “A La Carte” services include: Loan processing; Brokerage services/account maintenance (if

offered by the plan); Distribution services; and Processing of qualified domestic relations orders.

(Id.)

investments within the Plan” in addition to direct fees paid by Equitable. (Id.) Plaintiff asserts

that large plans have the leverage to take advantage of economies of scale and achieve a lower fee

rate charged per-participant, rather than a fee structure based on the assets included in a fund. (Id.

¶ 100.)

Defendants filed the present Motion to Dismiss Plaintiff’s First Amended Complaint on

October 22, 2025. (See Defs.’ Mot.) Stable Value Investment Association filed its Motion for

Leave to file Amicus Brief on October 29, 2025. (See SVIA Br.) Plaintiff filed his opposition

brief on November 24, 2025. (ECF 20, “Opposition” or “Opp.”) Defendants replied on December

22, 2025. (ECF 22, “Reply.”) The Court granted SVIA leave to file Amicus Brief on May 15,

2026. (ECF 26.) SVIA filed an amicus brief in support of Defendant’s Motion to Dismiss on May

18, 2026. (ECF 27.)5

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a court to dismiss a complaint that fails

“to state a claim upon which relief can be granted[.]” For a complaint to survive dismissal under

Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,

570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows

the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”

Id. Further, a plaintiff must “allege sufficient facts to raise a reasonable expectation that discovery

will uncover proof of her claims.” Connelly v. Lane Const. Corp., 809 F.3d 780, 789 (3d Cir.

5 SVIA’s May 18, 2026 brief was not considered when the Court decided Defendant’s Motion to

Dismiss.

2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and

legal elements. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements

of the elements of a claim are legal conclusions, and therefore, are not entitled to a presumption of

truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011). The Court, however,

“must accept all of the complaint’s well-pleaded facts as true.” Fowler, 578 F.3d at 210.

III. ANALYSIS

A. Breach of the Duty of Prudence

In Count I of his First Amended Complaint, Plaintiff argues that the Administrative

Committee and the Investment Committee breached their duties to prudently manage Plan

investments by selecting and retaining the Equitable Fund “despite poor performance in relation

to other comparable investments.” (FAC ¶ 117.) Plaintiff claims this breach directly and

proximately caused “millions of dollars of losses due to excessive costs and lower net investment

returns” which lowered the amount of savings Plan participants had available to them for

retirement. (Id. ¶ 118.) Plaintiff further claims that pursuant to 29 U.S.C. §§ 1109(a) and

1132(a)(2), the Administrative Committee and Investment Committee are obligated to restore the

losses they caused by their breach of the duty of prudence. (Id. ¶ 119.)

Defendants argue in response that Plaintiff failed to show plausible facts giving rise to an

inference of imprudent management. (Defs.’ Mot. at 9.) Specifically, Defendants claim Count I

is not well-plead because (1) allegations of underperformance, without more, fail to show an

inference of imprudence; (2) Plaintiff fails to provide adequate benchmarks for comparison of the

Equitable Fund because the Complaint does not identify or discuss the characteristics of the fifteen

stable value fund comparators; and (3) Plaintiff’s allegation that the Equitable Fund was riskier

than comparators is conclusory and implausible. (Id.) Additionally, Defendants argue Plaintiff’s

claims are time-barred by ERISA’s six-year statute of limitations and the Administrative

Committee has no fiduciary duty regarding managing Plan investments. (Id.)

When assessing the sufficiency of an ERISA complaint, courts assess the reasonableness

of a fiduciary’s actions. Courts “bear[] in mind ERISA’s twin goals of protecting participants and

encouraging plan creation through a predictable set of liabilities for employers.” Mator v. Wesco

Distribution, Inc., 102 F.4th 172, 184 (3d Cir. 2024). Courts must also “give due regard to the

range of reasonable judgments a fiduciary may make based on her experience and expertise”

because “the circumstances facing an ERISA fiduciary will implicate difficult tradeoffs.” Hughes

v. Northwestern University, 595 U.S. 170, 177 (2022). Therefore, “[t]o plead a breach of the duty

of prudence under ERISA … a plaintiff must plausibly allege fiduciary decisions outside a range

of reasonableness.” Mator, 102 F. 4th at 184. An ERISA fiduciary must manage the plan “solely

in the interest of the participants and beneficiaries and ... with the care, skill, prudence, and

diligence under the circumstances then prevailing that a prudent [person] … would use.”

§ 1104(a)(1).

Courts do not determine prudence based on the results of an investment choice, “but on

process—that is, whether the facts, assessed holistically, permit a reasonable inference that a

fiduciary’s decision-making process was deficient.” Grink v. Virtua Health, Inc., 812 F. Supp. 3d

434, 451 (D.N.J. 2025) (quoting In re Unisys Sav. Plan Litig., 74 F.3d 420, 434 (3d Cir. 1996)).

When a plaintiff does not have direct evidence of a defendant’s process in making investment

decisions, convincing circumstantial evidence may suffice to establish an inference of imprudent

process. See Anderson v. Intel Corp. Inv. Pol’y Comm., 137 F.4th 1015, 1022 (9th Cir. 2025) (“[A]

plaintiff can make circumstantial factual allegations from which the court may reasonably infer

from what is alleged that the process was flawed.”) (internal quotations omitted); Pension Ben.

Guar. Corp. ex rel. St. Vincent Cath. Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712

F.3d 705, 718 (2d Cir. 2013) (“[A] claim alleging a breach of fiduciary duty may still survive a

motion to dismiss if the court, based on circumstantial factual allegations, may reasonably ‘infer

from what is alleged that the process was flawed.’”) (quoting Braden v. Wal-Mart Stores, Inc., 588

F.3d 585, 596 (8th Cir. 2009)). The “key” to establishing an inference of imprudence based on

circumstantial evidence is to present identifiable comparators—that is, a “meaningful benchmark”

for comparison—to the Court, which requires more than simply alleging underperformance. See

Albert v. Oshkosh Corp., 47 F.4th 570, 581 (7th Cir. 2022).

Here, Plaintiff primarily relies on allegations of underperformance to establish imprudent

management of the Plan. Plaintiff argues “the [Equitable Fund’s] rates decreased when it should

have increased and there were wide disparities” between the Equitable Fund’s rates and

“comparable GICs, including GIC rates offered by the same carriers.” (Opp. at 19.) The Court

agrees with Defendants that this is simply “a repackaged allegation of underperformance” because

Plaintiff does not elaborate on how Defendants’ process lead to Defendants choosing the Equitable

Fund to the detriment of the Plan participants. Hindsight is an insufficient foundation to show

imprudence. See Grink, 812 F. Supp. 3d at 451. For example, courts have recognized duty of

prudence claims when a plaintiff presented evidence that a plan’s fiduciaries did not follow the

plan’s Investment Policy Statement criteria. Id. at 443.

Because Plaintiff’s theory of imprudence rests solely on the allegation that the Plan had

“considerable leverage to bargain for higher crediting rates” yet underperformed, meaningful

benchmarks are necessary to determine whether an inference of imprudence has been stated. (FAC

¶ 32.) However, Plaintiff did not establish that the comparator GICs presented in the First

Amended Complaint are sufficiently similar to the Equitable Fund to constitute “meaningful

benchmarks.” Mator, 102 F.4th at 188. As previously discussed, crediting rates are not the only

characteristics of GICs that fiduciaries consider when choosing investments. In the First Amended

Complaint, Plaintiff constructed a chart of GICs with varying amounts of assets and plan

participants. (FAC ¶ 85.) Plaintiff only “sets forth the performance of just two funds over a four-

year period and for the other thirteen, just one or two years of performance, often in non-

consecutive years.” (Id.) The Court agrees with Defendants that a greater analysis of the

characteristics of the selected GICs and their specific characteristics and plan goals is necessary

for the Court to determine they are “sufficiently similar” for the purpose of being “meaningful

benchmarks” supporting an inference of imprudence.

Plaintiff argued in his opposition brief that whether benchmarks are comparable is not

properly resolved at the Motion to Dismiss stage. (Opp. at 11.) Plaintiff is right that it would be

premature to conclusively hold whether the alleged comparators are sufficiently similar, or

whether the alleged 48% rate of underperformance was sufficiently calculated. (See FAC ¶ 86.)

However, the Court may properly rule that a plaintiff has not met their burden of presenting a

plausible argument that the comparators are sufficiently similar benchmarks, and does so today.

Therefore, Defendants’ Motion to Dismiss Count I of Plaintiff’s First Amended Complaint is

GRANTED and Count I of Plaintiff’s First Amended Complaint is hereby DISMISSED without

prejudice.6

B. Breach of the Duty to Monitor

Count II of the First Amended Complaint asserts that Equitable failed to adequately

monitor the Administrative Committee and Investment Committee in performing their fiduciary

6 Because Count I is dismissed, the Court need not decide whether Plaintiff’s claim is time barred

or whether the Administrative Committee is a fiduciary which could be liable for breach of the

duty of prudence.

duties. (FAC ¶¶ 121-127.) This Court has held that a duty to monitor claim cannot be asserted in

an ERISA action when a duty of prudence claim has not been established. In re Allergan ERISA

Litigation, No. 17-1554, 2018 WL 8415676 at *7 (D.N.J. July 2, 2018) (quoting Rinehart v.

Lehman Bros. Holdings Inc., 817 F.3d 56, 68 (2d Cir. 2016)). Plaintiff rests his duty to monitor

claim on the plausibility of his breach of the duty of prudence claim. (Opp. at 32.) Therefore,

Defendants’ Motion to Dismiss Count II of Plaintiff’s First Amended Complaint is GRANTED

and Count II of Plaintiff’s FAC is DISMISSED without prejudice.

C. Prohibited Transaction claims

Count III of the First Amended Complaint asserts two claims of prohibited transactions in

violation of ERISA §§ 406(a)(1)(C) and (D). (See FAC ¶¶ 128-33.) Section 406(a)(1)(C) prohibits

a direct or indirect “furnishing of goods, services, or facilities between the plan and a party in

interest.” § 406(a)(1)(C). Section 406(a)(1)(D) prohibits the “transfer to, or use by or for the

benefit of a party in interest of any assets of the plan.” § 406(a)(1)(D). Plaintiff argues the contract

for recordkeeping between Alight and the Plan violated § 406(a)(1)(C) because the fees were

“excessive.” (FAC ¶ 132.) Plaintiff supports this claim by presenting data showing that the Plan

paid higher recordkeeping fees than other plans. (Id. ¶ 107.) Plaintiff asserts Defendants violated

§ 406(a)(1)(D) by making payments pursuant to the contract using income from the Plan to benefit

a party in interest. (FAC ¶ 112.) A claim under § 406(a)(1) is well-plead if the plaintiff established

a fiduciary “(1) caused a plan to engage in a transaction (2) that the fiduciary knows or should

know ... constitutes a direct or indirect ... furnishing of goods, services, or facilities (3) between

the plan and a party in interest.” Cunningham v. Cornell Univ., 604 U.S. 693, 700 (2025) (cleaned

up).

Defendants do not dispute that Alight received fees for recordkeeping or that the

Investment Committee was a fiduciary under the Plan. (Defs.’ Mot. at 17.) Defendants instead

argue that Alight was not a party in interest at the time “it was engaged to provide recordkeeping

services to the Plan.” (Id.) Defendants cite Danza v. Fidelity Mgmt. Tr. Co., 533 F. App’x 120,

125-26 (3d Cir. 2013) for support, on the grounds this Circuit has already held that “a service

provider is not a party in interest at the time it first contracts with a plan.” (Id. at 18.) Furthermore,

Defendants argue that payments pursuant to a valid contract are not “transactions” within the

meaning of § 406(a)(1)(D). (Id. at 19.) Defendants also argue Plaintiff’s claim is time-barred

pursuant to ERISA’s six-year statute of limitations because the contract was formed over a decade

before Plaintiff brought the present claims. (Id. at 19.) Plaintiff argues in response that

Defendants’ reliance on Danza is misplaced because it “did not involve revenue sharing and are

therefore inapplicable.” Plaintiff also argues that the Supreme Court clarified in Cunningham that

revenue sharing agreements can constitute a prohibited transaction and effectively overruled

Danza. (Opp. at 39.)

The Court agrees with Defendants that the holding in Cunningham was limited to holding

that a plaintiff need not combat potential affirmative defenses in pleading a prohibited transaction

claim. (Reply at 10.) Cunningham, 604 U.S. at 702 (“The Court today holds that plaintiffs seeking

to state a § 1106(a)(1)(C) claim must plausibly allege that a plan fiduciary engaged in a transaction

proscribed therein, no more, no less.”). The Court also holds that Danza is on point and is still

good law after Cunningham. Danza clearly held that the defendant, Fidelity, a recordkeeping

servicer, was not a party in interest at the time the recordkeeping contract was formed. “While

Fidelity is currently a party in interest as a service provider to the plan, it was not ‘providing

services’ and was not a fiduciary when the Trust Agreement was signed, so that transaction did

not fall within a prohibited category.” Danza, 533 F. App’x at 125. Like Fidelity in Danza, Alight

did not provide services to the Plan at the time the contract was formed. Thus, Plaintiff fails to

state a claim under § 406(a)(1)(C).

As for subsection (D), Defendants argue it is well-established that payments pursuant to a

valid contract are not prohibited under ERISA. See D.L. Markham DDS, MSD, Inc. 401(K) Plan

v. Variable Annuity Life Ins. Co. (“D.L. Markham”), 88 F.4th 602, 610 (5th Cir. 2023).

Defendants also find support in cases from the Western District of Texas and Southern District of

California. (Defs.’ Mot. at 19.) In response, Plaintiff argues that the plain text of § 1106(a)(1)(C)

provides no exception for transactions pursuant to a contract that “causes the service provider to

be a party in interest.” (Opp. at 40.) Plaintiff cites a footnote in Comerica Bank for DALRC

Retiree Benefit Tr. v. Voluntary Emp. Benefits Assocs., Inc., No. 09-CV-1164, 2012 WL 12948705,

at *18 n. 27 (N.D. Ga. Jan. 11, 2012). In fact, that court disagreed with an Opinion by this Court

in UFCW Local 56 Health & Welfare Fund v. Brandywine Operating P’ship, L.P., 2005 WL

3555390 (D.N.J. 2005). The Comerica Bank court interpreted Brandywine to stand for the

proposition that “to be a party in interest, the party must have a service relationship that exists

independently of the transaction that is allegedly prohibited by 29 U.S.C. § 1106.” Comerica Bank

for DALRC Retiree Benefit Trust, 2012 WL 12948705 at *18 n. 27. Therefore, this Court’s

precedents align better with the cases cited by Defendants, which state a transaction pursuant to a

valid contract does not give rise to ERISA liability. Accordingly, Defendants’ Motion to Dismiss

Count III of Plaintiff’s First Amended Complaint is GRANTED and Count III of Plaintiff’s First

Amended Complaint is DISMISSED without prejudice.7

7 Because Plaintiff fails to state a claim under Section 406(a), the Court need not analyze

Defendants’ statute of limitations arguments.

IV. CONCLUSION

For the reasons stated herein, Defendants’ Motion to Dismiss (ECF 15) is GRANTED.

Plaintiff’s First Amended Complaint is DISMISSED without prejudice in its entirety. An

accompanying Order follows this Opinion.

/s/ Jamel K. Semper .

HON. JAMEL K. SEMPER

United States District Judge

Orig: Clerk

cc: Andre M. Espinosa, U.S.M.J.

Parties