Posted August 21st, 2019.
A U.S. District Court judge in Cedar Rapids, Iowa, rejected a petition by Transamerica Corp. to dismiss an ERISA fiduciary breach lawsuit against the company and its defined contribution plan.
Current and former plan participants sued in January alleging that plan managers violated their fiduciary duties by imprudently retaining six proprietary, poor-performing investment options. They also contended that the company failed to adequately monitor the performance of plan managers.
“Based on the well-pleaded facts regarding the challenged funds’ performance, plaintiffs’ imprudence claim is plausible at this stage,” wrote U.S. District Judge C.J. Williams in the case of Karg et al. vs. Transamerica Corp. et al., in which the participants are seeking class-action status.
“Plaintiffs have alleged sufficient facts to establish a failure to monitor claim under ERISA,” Mr. Williams’ Tuesday opinion added.
Transamerica said this case should be dismissed for several reasons, including the argument that allegations in this case are the same as those in another ERISA case that was settled in 2016. “The court finds that the claims in this case arise out of and related to different alleged conduct than the claims” in the 2016 class-action settlement.
The Transamerica 401(k) Retirement Savings Plan, Cedar Rapids, Iowa, had assets of $1.9 billion as of Dec. 31, 2017, according to the latest Form 5500 filing.