A participant in Allstate Corp.'s 401(k) savings plan filed a class-action ERISA suit against the company and other related parties for "failing to prudently select and monitor" the $5 billion defined contribution plan's investment options and costing its participants $65 million.
The complaint, filed Oct. 30 by Katherine Cutrone in U.S. District Court in Chicago, accuses the defendants of loading the plan "with poorly performing" target date funds managed by Northern Trust. The suit contends that plan administrators "kept these funds on the plan's investment menu ... despite their continued underperformance," and despite there being similar funds in the marketplace that performed better.
The defendants' actions cost participants "upwards of $65 million in retirement savings," the suit said.
Neither Michael M. Mulder, from the Law Offices of Michael M. Mulder and chief counsel to the plaintiff, nor representatives from Allstate could be immediately reached for comment.
