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New York Life 401(k) Options Primarily Profit NYL Class Action

The complaint for this class brings suit against defendants New York Life Insurance Company, the Boards of Trustees for two of its retirement plans, and individual members of the plans’ Boards, all of whom it names as fiduciaries of the plans. The complaint alleges that “this suit is about corporate self-dealing and the prohibited transfer of employees’ retirement assets to Defendants at the expense of the retirement savings of company employees and … agents.”

The class for this action is all participants and beneficiaries in the New York Life Insurance Employee Progress Sharing Investment Plan and the New York Life Insurance Company Agents Progress Sharing Plan who had assets in the plans’ MainStay Income Builder Fund, MainStay Epoch US All Cap Fund, MainStay Epoch US Small Cap Fund, or the Fixed Dollar Account, on or after March 2, 2015.

The two plans are the New York Life Insurance Employee Progress Sharing Investment Plan and the New York Life Insurance Company Agents Progress Sharing Plan. The suit is brought under the Employee Retirement Income Savings Act (ERISA).

The complaint alleges, “Defendants are all fiduciaries and parties-in-interest of the 401(k) Plans who are required by ERISA to act prudently and solely in the interest of the Plans’ participants when making decisions with respect to 401(k) investments.” However, the complaint claims they have breached these duties and in fact put the interests of New York Life first.

During the period covered by this case, the complaint alleges, they did this in two ways.

First, it says, the default option for the plans has been “a New York Life general account insurance fund called the Fixed Dollar Account.” That is, if a participant puts money into the plan but does not have any ideas about how to invest it, the money would automatically be invested in that fund. However, the complaint claims that the fund is not diversified and therefore “not a permissible ‘qualified default investment alternative’” or QDIA. This, the complaint alleges, benefitted New York Life more than the participants whose funds were invested in it.

Second, the plans offered other New York Life investment options that did not perform well, including the MainStay Income Builder Fund, MainStay Epoch US All Cap Fund, and MainStay Epoch US Small Cap Fund, “earning New York Life and its affiliates windfall profits at the expense of the retirement savings of New York Life employees and agents.”

In addition, the complaint alleges that the defendants did not carry out their duties to “loyally and prudently monitor the fees and performance of the Plans’ investment options—they simply retained the in-house funds to enrich New York Life and/or its affiliates.”

As a result, the complaint concludes, “the 401(k) Plans’ participants were deprived of millions of dollars in retirement plan returns that they would have earned if Defendants had selected non-proprietary fund options for the Plans and a QDIA that met applicable regulations.”

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

New York Life 401(k) Options Primarily Profit NYL, Not Participants Complaint

March 3, 2021

The complaint for this class brings suit against defendants New York Life Insurance Company, the Boards of Trustees for two of its retirement plans, and individual members of the plans’ Boards, all of whom it names as fiduciaries of the plans. The complaint alleges that “this suit is about corporate self-dealing and the prohibited transfer of employees’ retirement assets to Defendants at the expense of the retirement savings of company employees and … agents.”

New York Life 401(k) Options Primarily Profit NYL, Not Participants Complaint

Case Event History

New York Life 401(k) Options Primarily Profit NYL, Not Participants Complaint

March 3, 2021

The complaint for this class brings suit against defendants New York Life Insurance Company, the Boards of Trustees for two of its retirement plans, and individual members of the plans’ Boards, all of whom it names as fiduciaries of the plans. The complaint alleges that “this suit is about corporate self-dealing and the prohibited transfer of employees’ retirement assets to Defendants at the expense of the retirement savings of company employees and … agents.”

New York Life 401(k) Options Primarily Profit NYL, Not Participants Complaint
Tags: Breach of Fiduciary Duty, ERISA Violations, Employment Violations, Retirement Plan Mismanagement