A participant in a 401(k) plan sponsored by Festival Fun Parks LLC, Newport Beach, Calif., filed a class-action lawsuit against managed account provider Stadion Money Management and insurer United of Omaha Life Insurance Co., alleging the two firms violated their ERISA fiduciary duties.
The lawsuit, filed Monday by plan participant Kimberly Davis in the U.S. District Court in Greensboro, N.C., alleges the two firms put their own interests ahead of participants in selecting their own investment options in the Stadion managed account offering when lower-cost and higher-performing options were available.
In the complaint, Ms. Davis alleges "there were identical options available in the plan menu that would have charged 50% less in fees" and "Stadion avoided those options because they did not generate as much revenue for its business partner, United of Omaha."
United of Omaha, a subsidiary of Mutual of Omaha Insurance Co., offers Stadion Money Management's managed account as an add-on service in its group annuity product for retirement savings plans, according to the complaint.
Stadion Money Management spokesman Gordon Lamb said in a statement: "We deny plaintiff's various allegations that Stadion violated fiduciary obligations to plan participants. Furthermore, we find many of the allegations are implausible and, frankly, don't make sense."
The Palace Entertainment 401(k) Plan had $32 million in assets as of Dec. 31, 2017, according to Festival Fun Parks' most recent Form 5500 filing.
United of Omaha spokesman Jim Nolan declined to comment.
