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PAUL SAUMER; WALTER A. SKALSKY, individually and on behalf of all others similarly situated,
Plaintiffs-Appellants,
v.
CLIFFS NATURAL RESOURCES INC., et al.,
Defendants-Appellees.
   No. 16-3449
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 1:15-cv-00954—Dan A. Polster, District Judge.
Decided and Filed: April 7, 2017
Before: MERRITT, COOK, and McKEAGUE, Circuit Judges.


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OPINION
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COOK, Circuit Judge. The Employee Retirement Income Security Act (“ERISA”) regulates employer-administered retirement plans. To safeguard employees’ retirement assets, ERISA requires plan fiduciaries to, among other things, manage plan assets prudently and diversify investments “so as to minimize the risk of large losses.” 29 U.S.C. § 1104(a)(1). For the past forty years, however, ERISA has also encouraged employee ownership of employer stock. To promote this goal, ERISA permits companies to offer an Employee Stock Ownership Plan (“ESOP”)—a retirement option designed to invest primarily in employer stock. Id. § 1107(d)(6)(A). Because ESOPs are, by definition, not prudently diversified, Congress fashioned an exemption to these core fiduciary duties: “the diversification requirement . . . and the prudence requirement (only to the extent that it requires diversification) of [§ 1104(a)(1) are] not violated by acquisition or holding of [employer stock].” Id. § 1104(a)(2).

This case requires us to reconcile ERISA’s requirement that a fiduciary act prudently with its blessing of undiversified ESOPs.

. . .

For the foregoing reasons, we AFFIRM the district court’s judgment.