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Rhode Island District Court Dismisses Allegations That Stable Value Fund is Too Conservative

A district court in Rhode Island dismissed claims by participants in the CVS Employee Stock Ownership Plan that plan fiduciaries imprudently invested plan assets in the plan’s stable value fund. Plaintiffs argued that the stable value fund had an excessive concentration of investments with ultra-short durations and excessive liquidity, both of which caused the fund to underperform comparable stable value funds. 

The court dismissed the complaint because the stable value fund “was invested in conformance with its stated objective and whether that strategy was prudent cannot be measured in hindsight” simply by judging its performance against industry averages. The case is Barchock v. CVS Health Corp., No. 16-601, slip op. (D.R.I. Apr. 18, 2017).

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About this Author

Neil Shah, Proskauer Rose, Labor Rights Lawyer, ERISA Litigation Attorney,
Associate

Neil Shah is an associate in the Labor & Employment Law Department and a member of the Employee Benefits, Executive Compensation & ERISA Litigation Practice Center.

Rutgers University School of Law, Newark, J.D., 2009

 

cum laude

Order of the Coif

Managing Editor, Rutgers Law Review

Dean's Merit Scholarship

 

New York University, College of Arts & Science, B.A., 2006...

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