Rozo v. Principal Life Insurance Co., No. 18-3310 (8th Cir. 2020)
Annotate this CaseThe Eighth Circuit reversed the district court's grant of summary judgment to Principal in an action brought under the Employee Retirement Income Security Act (ERISA). The court held that Principal is a fiduciary when its sets the Composite Crediting Rate (CCR) for its 401(k) retirement plan. Under the two-part test in Teets v. Great-West Life & Annuity Ins. Co., 921 F.3d 1200 (10th Cir. 2019), the court held that Principal's setting of the CCR does not conform to a specific term of its contract with the employer plan, and the plan sponsors here did not have the unimpeded ability to reject the service provider's action or terminate the relationship. Accordingly, the court reversed and remanded for further proceedings.
Court Description: [Benton, Author, with Smith, Chief Judge,and Gruender, Circuit Judge] Civil case - ERISA. Principal is a fiduciary when it sets the rate of return (Composite Crediting Rate) for its 401(k) retirement plan; applying the test set out in Teets v. Great-West Life & Annuity INs. Co., 921 F.3d 1200 (10th Cir. 2019), which the parties agree guides the court's analysis in this case, Principal is a fiduciary because as a provider its setting of the rate does not conform to a specific term of its contract with the employer plan and the plan sponsors do not have unimpeded ability to reject Principal's actions or terminate the relationship; reversed and remanded for further proceedings.
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