The Wintrust Financial Corp. Retirement Savings Plan is a defined-contribution plan. This class action brings suit against Wintrust Financial Corp., its Board of Trustees, and the plan’s Administrative Committee, alleging that these fiduciaries breached their duties to the plan, to make sure that expenses were fair and reasonable and that investment options were prudent and diverse. It makes its claims under the Employee Retirement Income Savings Act of 1974 (ERISA).
The class for this action is all participants and beneficiaries in the Wintrust Financial Corp. Retirement Savings Plan, at any time between January 1, 2018 and the date of judgment in this case, or an earlier date the court determines, including any beneficiary of a deceased person who was a participant in the plan at any time during the above period.
The defendants in this case, the complaint alleges, “are fiduciaries under ERISA, and, as such, owe specific duties to the Plan…, including obligations to act for the exclusive benefit of participants, ensure that the investment options offered through the Plan are prudent and diverse, and ensure that Plan expenses are fair and reasonable in relation [to] the services obtained.”
According to the complaint, the plan had nearly 6,000 participants whose balances and assets added up to around $541 million, putting it in the top 0.2% of such plans by size. Large plans such as this one, the complaint alleges, have the bargaining power to obtain low prices on administrative and investment management services. The complaint also says that the defendants in this case chose and retained “poorly-performing investments instead of offering more prudent alternative investments that were readily available at the time…”
Investment options in the plan included mutual funds, collective trust funds (which the complaint calls, “mutual funds without the SEC regulation”), and the Wintrust Financial Corporation Common Stock Fund.
The complaint alleges in particular that the BlackRock LifePath Index Funds, a set of target date funds (TDFs), are poorly-performing and imprudent investments. It contains numerous charts to support this contention, including comparisons with other, similar funds, such as Vanguard Target Retirement, T. Rowe Price Retirement, and Fidelity Freedom funds.
The charts look at things like equity allocation and three-year and five-year performance histories. The charts also examine comparisons of returns at specific points during the class period, alleging that at various specific points in time, “a fiduciary prudently monitoring the BlackRock TDFs would have observed” certain “performance issues,” that is, lower rates of return and low rankings for returns as compared to the other funds cited.
The complaint alleges that the charts show that the “BlackRock TDFs dramatically, repeatedly underperformed the average return of the Comparator TDFs for virtually the entire relevant period” at issue in this class action.
Article Type: LawsuitTopic: Employment
Most Recent Case Event
Wintrust Financial Corp. Retirement Plan Imprudent Investments Complaint
July 29, 2022
The Wintrust Financial Corp. Retirement Savings Plan is a defined-contribution plan. This class action brings suit against Wintrust Financial Corp., its Board of Trustees, and the plan’s Administrative Committee, alleging that these fiduciaries breached their duties to the plan, to make sure that expenses were fair and reasonable and that investment options were prudent and diverse. It makes its claims under the Employee Retirement Income Savings Act of 1974 (ERISA).
Wintrust Financial Corp. Retirement Plan Imprudent Investments ComplaintCase Event History
Wintrust Financial Corp. Retirement Plan Imprudent Investments Complaint
July 29, 2022
The Wintrust Financial Corp. Retirement Savings Plan is a defined-contribution plan. This class action brings suit against Wintrust Financial Corp., its Board of Trustees, and the plan’s Administrative Committee, alleging that these fiduciaries breached their duties to the plan, to make sure that expenses were fair and reasonable and that investment options were prudent and diverse. It makes its claims under the Employee Retirement Income Savings Act of 1974 (ERISA).
Wintrust Financial Corp. Retirement Plan Imprudent Investments Complaint