A participant in a 401(k) plan offered by Estee Lauder Inc. sued the company, plan fiduciaries, the plan's record keeper and custodian for violating their fiduciary duties by failing to protect her account against unauthorized distributions.
The account of Naomi Berman was drained of $99,000, and Ms. Berman accused the defendants of failing to notify her or seek authorization for the distributions, according to her lawsuit filed Oct. 9 in a U.S. District Court in San Francisco.
There were three unauthorized distributions in 2016. By the time Ms. Berman received a mailed notice from the plan about the first distribution, all of the distributions had been made, the lawsuit said.
"Defendants, and each of them, breached their fiduciary duties of loyalty and prudence by causing or allowing the Lauder plan to make unauthorized distributions of plan assets," the lawsuit said.
She accused the defendants of "failing to establish distribution processes to safeguard the Lauder plan assets against unauthorized withdrawals" and "failing to identify and halt suspicious distribution requests."
Representatives of Alight Solutions, the plan's record keeper, and State Street Bank & Trust, the custodian, declined to comment. A request for information from the company went unanswered.
Ms. Berman accused the company's benefits committee of not responding to her written request for plan documents, a violation of ERISA, the lawsuit said.
The lawsuit also said Ms. Berman "made at least 23 calls" to the customer service center run by Alight Solutions — then known as Hewitt Associates — between Oct. 24, 2016, and Jan. 2, 2017. The customer service center completed its investigation and told her no money had been recovered, adding that her plan account "would not be made whole for the losses," the lawsuit said.
"None of the defendants contacted her prior to the distributions to obtain her consent," the lawsuit said.
The Estee Lauder Companies 401(k) Savings Plan, New York, had $1.65 billion in assets as of Dec. 31, 2018, according to the latest Form 5500.