A participant in the Jackson National Life Insurance Co.'s 401(k) plan has sued the company, alleging plan executives violated ERISA by emphasizing proprietary Jackson investment products over “virtually identical” less expensive options from unaffiliated providers.
“Jackson National put its financial interests ahead of the plan's interests by selecting high-cost proprietary investments,” the complaint states, filed March 29 in U.S. District Court in Lansing, Mich. By “failing to adequately consider” non-proprietary investments and “other low-cost options,” the company breached its fiduciary duties under the Employee Retirement Income Security Act, said the complaint in Pease vs. Jackson National Life Insurance Co.
“Plan participants pay a heavy price by being forced to invest in poorly performing, high-cost Jackson National proprietary funds,” said plaintiff Becky Pease in the suit. She is a Jackson employee and participant in the Jackson National Life Insurance Co. Defined Contribution Retirement Plan. She is seeking class-action status.
The plan had $710.3 million in assets as of Dec. 31, 2015, according to the latest Form 5500 filed with the Department of Labor. In 2014 and 2015, the lawsuit said, most plan assets were invested in Jackson National options.
“As a matter of policy, Jackson does not discuss ongoing litigation,” the company said in an emailed statement. “However, Jackson is proud to provide competitive benefits to associates, including generous profit-sharing contributions and workshops to help associates maximize the benefits provided by Jackson's 401(k) plan.”