"The BlackRock TDFs are significantly worse performing than many of the mutual fund alternatives offered by TDF providers and, throughout the class period, could not have supported an expectation by prudent fiduciaries that their retention in the plan was justifiable," said the plaintiffs in Abel et al. vs. CMFG Life Insurance Co. et al., filed Aug. 19 in a U.S. District Court in Madison, Wis.
The plaintiffs, who are seeking class-action status, said the alleged ERISA violations started Aug. 19, 2016. BlackRock isn't a defendant.
"Any objective evaluation of the BlackRock TDFs would have resulted in the selection of a more consistent, better performing, and more appropriate TDF suite," the lawsuit said. "Had defendants carried out their fiduciary responsibilities in a single-minded manner with an eye focused solely on the interests of the participants, they would have come to this conclusion and acted upon it."
Rachel Strauch-Nelson, a spokeswoman for CUNA Mutual Group, the parent of CMFG Life Insurance Co., wrote in an email that the company doesn't comment on pending or ongoing litigation.
BlackRock said in a prepared statement that its investment process "takes into account multiple factors, including return objectives, market cycles, time horizon, and risk management. As a result, BlackRock's LifePath index funds are highly regarded by many fiduciary decision-makers and independent evaluators of investment products for delivering consistently strong outcomes for plan participants over time."
The CUNA Mutual 401(k) Plan for Non-Represented Employees, Madison, Wis., had assets of $865 million as of Dec. 31, 2020, according to the latest Form 5500.
