Participants in the MetLife 401(k) Plan are suing MetLife Group Inc., Metropolitan Life Insurance Co. and other related parties for breaching their fiduciary duties for managing the plan's investment options, according to a lawsuit.
Lead plaintiffs Rita Kohari, John Radolec and Mohani Jaikaran contend that sponsors of the $7.3 billion defined contribution plan provided only MetLife index funds as investment options for participants, when cheaper and better performing alternatives were available, according to the suit filed Monday in federal court in New York.
Had the defendants conducted a "prudent and objective review of comparable" available investment options, they would have found "numerous available investments that were less costly and superior to the MetLife Index Funds that defendants selected and retained in the plan," according to the complaint.
"But instead of investing in any of these competitive index fund offerings in the marketplace, defendants choose to generate profits for MetLife by investing exclusively in the MetLife index funds, which charged fees that were up to six times higher than marketplace alternatives that tracked the exact same index," the suit said.
The plaintiffs argue that using only MetLife funds cost participants "millions of dollars in excessive fees and lost investment returns."
Paul Lukas, an attorney at the law firm Nichols Kaster who’s representing the plaintiffs, could not be immediately reached to provide comment. MetLife spokeswoman Kim Friedman said the company does not comment on pending litigation.