Lawsuit filed against Transamerica claims they mishandled employees’ retirement funds

Posted January 3rd, 2019.

As It Appeared On
KGAN

by Eva Andersen

CEDAR RAPIDS, Iowa (CBS2/FOX28) — Acting as the financial trustee for all of its employees’ 401K plans, Transamerica is required by the Employee Retirement Income Security Act of 1974 (ERISA statute) to periodically check in and see how their employees’ investments are performing.

“The employer has a duty to monitor the plan continuously and remove from the plan imprudent investments,” said Charles Field, lawyer for Sanford Heisler Sharp, LLP. Field is representing three Transamerica employees, including one in Iowa, who are suing Transamerica for failing to follow ERISA’s regulations.

Field says Transamerica retained several poorly-performing investments for years.

“These investments underperform year in and year out,” said Field. “It’s not just one or two years of underperformance, but five, six, seven — up to 10 years that these funds underperformed their investment benchmark.”

A company spokesperson sent CBS2/FOX 28 the following statement:

“Reflecting our core mission, Transamerica provides a retirement plan with matching contributions to our employees to help them prepare for a secure and confident retirement. In addition to proprietary funds, many of which are sub-advised by unaffiliated investment managers, our Plan includes a range of non-proprietary funds (both actively and passively managed), low-cost collective investment trust funds and a subsidized stable value fund — and gives participants the option of investing in a variety of mutual funds through a Schwab brokerage window. Transamerica also waives all Plan recordkeeping fees.

Our business complies with all applicable state and federal statutes and regulations, and participates in periodic regulatory reviews. The allegations of wrongdoing against Transamerica in the recently filed lawsuit – which focuses on six ‘proprietary investment portfolios’ in the Plan – are false and we will vigorously oppose the case.”

Mike Tryon, of Tryon Investments in North Liberty, says anyone who is worried about the management of their 401K plan should get a second set of eyes.

“Find out what their risk tolerance is, find out what their timeline is, and guide them through the plan,’ said Tryon.

He encourages everyone, as soon as possible, to have a discussion with their company’s plan advisor or and independent form to become better educated about their investments.

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