Two participants in a 401(k) plan administered by Northern Trust Co. sued the company and fiduciaries, claiming ERISA violations in the plan's use of a proprietary target-date series.
The lawsuit, filed June 1 in a U.S. District Court in Chicago, is virtually identical to another ERISA lawsuit filed against Northern Trust and plan fiduciaries by a former plan participant in November 2020. It also alleged ERISA violations related the proprietary target-date series. The lawsuit also was filed in Chicago.
Plaintiffs in both cases seek class-action status.
The same law firms represent the plaintiffs in the June lawsuit, Conlon and Travis vs. The Northern Trust Co. et al., and in the November lawsuit, Callaway vs. Northern Trust Co. et al.
Scott & Scott Attorneys At Law and the Law Offices of Michael M. Mulder represent plaintiffs in both cases. In addition, the firm Pfeiffer Wolf Carr Kane & Conway represents plaintiffs in the June lawsuit.
"Defendants breached their fiduciary duties by failing to prudently select and monitor the plan's investment options," said the complaint in the June lawsuit. "In disregard of their fiduciary duties, defendants loaded the plan with poorly performing proprietary funds ... and then kept these funds on the plan's investment menu ... despite their continued underperformance."
The complaint said the proprietary Northern Trust target-date series is the only target-date option in the plan and is the qualified default investment option. The plaintiffs characterized as "deficient" the fiduciaries' selection and monitoring of the target-date series, alleging that the series continues to perform poorly relative to benchmarks and to "comparable" target-date series.
“Northern Trust believes the Northern Focus Funds have been an appropriate vehicle for retirement savings, and plans to defend itself from the lawsuit’s claims,” the company wrote in an emailed statement.
The Northern Trust Co. Thrift-Incentive Plan had $2.5 billion in assets as of Dec. 31, 2019, according to the latest Form 5500.
