A federal District Court judge in Omaha, Neb., has rejected a request by Mutual of Omaha Insurance Co. to dismiss a lawsuit alleging the company's 401(k) plan fiduciaries violated their ERISA duties in managing the plan.
"The court finds that the facts alleged by the plaintiffs constitute a plausible claim of misconduct in the form of a breach of fiduciary duty and loyalty at this point in the lawsuit," Senior U.S. District Judge Joseph F. Bataillon, wrote on Dec. 31 in the case of Lechner et al. vs. Mutual of Omaha Insurance Co. et al.
Participants in the 401(k) plan, who are seeking class action status, accused the company, unnamed plan fiduciaries and an affiliate, United of Omaha Life Insurance Co., of self-dealing in the management of the plan, according to the complaint filed 12 months ago.
The plaintiffs alleged the plan favored some proprietary products over other investment options, charging extra fees for non-proprietary funds and choosing a proprietary capital preservation fund that was more expensive than "scores of other better capital preservation funds on the market," the complaint said.
The Mutual of Omaha 401(k) Long-Term Savings Plan had assets of $902.9 million as of Dec. 31, 2017, according to the latest Form 5500 filing.