Summary of the Lawsuit
On March 3, 2021, a participant in a 401(k) Plan offered to employees and agents of New York Life Insurance Company (NYL) filed the above referenced class action in the United States District Court for the Southern District of New York. The class action is brought on behalf of current and former employees and insurance agents of New York Life Insurance Company under the Employee Retirement Income Security Act (“ERISA”).
Plaintiff claims that Defendants, including NYL, the Boards of Trustees of the 401(k) Plans offered by NYL (“Trustees” or “Boards of Trustees”), and individual members of the Boards of Trustees, breached their fiduciary duties under ERISA related to the management of the 401(k) Plans (the “New York Life Insurance Employee Progress Sharing Investment Plan” and the “New York Life Insurance Company Agents Progress Sharing Plan”.
This lawsuit is about corporate self-dealing and the prohibited transfer of employees’ retirement assets to Defendants at the expense of the retirement savings of New York Life employees and agents. 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) Plan investments.
Summary of the Claims
Plaintiff claims that Defendants breached their fiduciary duties with respect to their disloyal and imprudent management of the Plans in violation of ERISA, to the detriment of participant investors who collectively lost millions of dollars.
Defendants violated federal pension law in two principal ways during the Class Period (March 2, 2015 and thereafter).
- First, the Plaintiff alleges that, unless participants affirmatively elected different investment options, Defendants impermissibly invested participants in the Fixed Dollar Account by default. The Complaint further alleges that it was imprudent, disloyal, and in contravention of Department of Labor regulations for Defendants to use the Fixed Dollar Account as participants’ default investment because the fund was undiversified, failed to provide sufficient investment returns to provide adequate retirement security, and caused the Plans’ assets to inure to New York Life’s benefit.
- Second, Defendants improperly favored and included New York Life’s own in-house investment funds in its Plans (specifically the MainStay Income Builder Fund, MainStay Epoch U.S. All Cap Fund and MainStay Epoch U.S. 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 its agents, despite the ready availability of superior, albeit unaffiliated, investment options.
As a result of Defendants’ fiduciary breaches and prohibited transactions, the 401(k) Plans’ participants were deprived of millions of dollars in retirement savings that they would have earned if Defendants had selected non-proprietary fund options for the Plans and a proper default investment for participants.
Plaintiff seeks to restore profits earned by New York Life and losses suffered by himself and other participants in the Plan as a result of Defendants’ conduct.
This lawsuit is brought on behalf of current and former employees and insurance agents of New York Life Insurance Company. Excluded from the Class are Defendants and members of their immediate families or any of their heirs, successors, or assigns.
Status of the Litigation
Krohnengold v. New York Life Insurance Company, Case No. 1:21-cv-01778, United States District Court, Southern District of New York, was filed on March 3, 2021. An amended complaint was filed on June 15, 2021. On August 10, 2022, the Court largely dismissed Defendants' motion to dismiss.
Whom to Contact for More Information
If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:
Michelle C. Yau, Esq. - email@example.com
Kai Richter, Esq. - firstname.lastname@example.org
Laura E. Older, Esq. - email@example.com
Doron Hadar, Paralegal - firstname.lastname@example.org
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Suite 500
Washington, D.C. 20005
Telephone: 888-240-0775 or 202-408-4600