An ERISA self-dealing lawsuit has recently been settled with Allianz. More than $12 million in monetary contributions were alleged in this ERISA self-dealing lawsuit. In addition to monetary contributions needing to be paid back into the account, administrative charges and the appointment of an independent monitor to serve on behalf of the investment line up was included in the settlement.
ERISA Self-Dealing Lawsuit Claims Breach of Fiduciary Duty
The settlement motion was filed in the U.S. District Court for the Central District of California. This claim of an ERISA self-dealing fiduciary breach dates back to 2015. Any managers of a plan must act in the best interests of the parties on the plan, but those bringing forth the lawsuit argue Allianz plan managers instead acted for their own best interests.
Two participants in the retirement plan for Allianz initially started the ERISA self-dealing lawsuit, arguing that the asset management partners and Allianz misused 401(k) plan assets for their own financial purposes. The legal claim has become the first example of an ERISA self-dealing lawsuit, which has become increasingly common with claims of fiduciary breach.
Models Used to Estimate Losses Found Millions
Within the legal claim, there were several different models used to identify the potential losses for the plan participants. The plaintiffs said they were damaged by both fiduciary duty and excessive feeds.
Two of the models to determine losses used comparable Vanguard index funds and the other two used popular funds within big 401(k) plans. Within three of those final models, the losses were between $39.5 million and $47 million. The final model estimated losses upwards of $65 million.
Under the terms of the settlement, Allianz will now have to pay more than $12 million into a common fund for the purpose of class members. Multiple depositions and the production of more than 150,000 pages of documents by defendants had already occurred by the time the ERISA self-dealing lawsuit came to a close. In June 2015, the court originally granted the plaintiffs motion for class certification, certifying a sub class seeking injunctive relief as well as one class seeking monetary relief.
Initially, Allianz moved for summary judgment in August of 2017, but the parties reached a settlement agreement in October ending the litigation.
Excessive fees were alleged in the ERISA self-dealing lawsuit affecting the overall benefits of the plan initially intended for the retirement benefit of plan participants. Allianz is now also responsible for hiring an independent investment consultant to review the investment policy statement and the investment plan line up on an annual basis for a minimum of three years.
If you or someone you know believes you have grounds for an ERISA self-dealing lawsuit, you need to schedule a time to consult with an experienced attorney. Contact the lawyers at Bradley/Grombacher to learn more. Fill out the form on this page to get further information.
Note: Bradley/Grombacher is not representing the plaintiff in this lawsuit.