A federal court judge in Columbus, Ohio, refused to dismiss a case against Nationwide Mutual Insurance Co. and its 401(k) plan fiduciaries by participants who said they received a lower crediting rate for a guaranteed investment contract than participants outside the plan.
A crediting rate is the interest rate applied to the book value of a stable value investment contract.
The plaintiffs sued in January 2020 and amended their complaint in October 2020 seeking class-action status in Sweeney et al. vs. Nationwide Mutual Insurance Co. et al.
In addition to complaining about an allegedly unfavorable crediting rate, the plaintiffs also accused Nationwide and some of its affiliates of self-dealing in the management of the guaranteed investment contract.
"The court is persuaded by plaintiffs' interpretation" of their complaint alleging one affiliate's dealing with the plan was "intended to benefit" the affiliate, U.S. District Judge James L. Graham wrote March 18. Mr. Graham wrote that plaintiffs have been persuasive in their allegation that one affiliate "earned compensation which resulted from its self-interested actions."
Nationwide Savings Plan. Columbus, Ohio, had $7.54 billion in assets as of Dec. 31, 2020, according to the latest Form 5500.
