A former employee has sued Massachusetts Mutual Life Insurance Co. and fiduciaries of a company 401(k) plan, alleging ERISA violations in the payment of investment and record-keeping fees and the selection of investment options.
"Defendants violated ERISA's fiduciary duties and its prohibitions on self-dealing by managing the plan and its assets through a process that favored the economic interests of Massachusetts Mutual Life Insurance Company over those of plan participants and beneficiaries," said the complaint filed Nov. 9 in a U.S. District Court in Springfield, Mass.
"This flawed process resulted in a series of outcomes that caused the plan and its participants and beneficiaries to sacrifice retirement savings to poor performance and swollen costs which inured to the benefit of MassMutual's bottom line," said the complaint in the case of Judy Lalonde vs. Massachusetts Mutual Life Insurance Co. et al.
Ms. Lalonde is a former employee, but she is still a participant in the MassMutual Thrift Plan. She is seeking class action status for her complaint.
Among its allegations, the lawsuit said the defendants "retained a series of excessively expensive and poorly performing proprietary mutual funds that are rarely, if ever, selected by objective and nonconflicted fiduciaries of large retirement plans like the MassMutual plan.
The lawsuit also said the company and its fiduciaries "failed ensure that the plan held the least expensive share class and/or investment vehicle for the investment strategies defendants selected for the MassMutual Plan" and caused the plan to pay MassMutual "unreasonable record-keeping fees."
A company representative did not return a request for comment.
The MassMutual Thrift Plan had assets if $4.13 billion as of Dec. 31, 2021, according to the latest Form 5500.
