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The Fourth Circuit today vacated  a judgment issued against the former trustees of an ERISA plan. Judge Agee wrote the opinion  in Plasterers’ Local Union No. 96 Pension Plan v. Pepper, which was joined in by Judge Duncan and Senior Sixth Circuit Judge Damon Keith.

After losses in the 1970s and ’80s, the former trustees adopted a very conservative investment plan and refused to consider deviations from it. Consequently, the plan generated lower returns than it would have adopted had it followed a more aggressive strategy.

The opening paragraph of the opinion:

Edgar Pepper and James Lertora (collectively “the Former Trustees”), former trustees of the Plasterers’ Local Union No.96 Pension Plan (“the Plan”), appeal from the judgment of the United States District Court for the District of Maryland in favor of the current trustees of the Plan (“the Current Trustees”). The district court’s judgment was based on its finding that the Former Trustees breached their fiduciary duties under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., regarding the investment of Plan assets as set forth under 29 U.S.C. § 1104(a)(1)(B) and (C). On appeal, the Former Trustees challenge the district court’s determination as to liability, its method of calculating damages, and the award of attorneys’ fees. We conclude that the district court erred as to each of these issues, and therefore vacate the judgment and remand the case for further proceedings.

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