United of Omaha faces ERISA lawsuit

Many who retire with 401(k) plans or other Tennessee employer-established pension plans feel confident in the administration of those plans when they are under the protection of the Employee Retirement Income Security Act of 1974. This federal law, known as ERISA, requires employers who voluntarily offer retirement or health benefits to follow specific regulations regarding the fiduciary management of the plans. This is to ensure the participants' best interests are protected and there are no conflicts of interest that could jeopardize their potential profits.

Recently, however, participants in a 401(k) offered by United of Omaha filed a lawsuit alleging that the fiduciaries of their plan were not looking out for them. In fact, the complaint says that the fiduciaries selected investment funds from among the products offered by Mutual of Omaha rather than exercising more discretion in the choices of investments. Because of this, participants were charged management fees twice, once to United of Omaha and once to the manager of the underlying fund.

Although there were apparently dozens of superior options for capital preservation for the 401(k) plan, the fiduciaries chose the Guaranteed Account. Guaranteed Account is managed by United of Omaha, so they collected substantial fees for capital preservation in addition to the other fees participants allegedly paid from their 401(k) profits. The lawsuit filed by participants claims that the fiduciaries sought profits for United of Omaha over those of the plan participants.

The pending lawsuit seeks damages as well as compensation for the lost profits. Like the participants in this plan, anyone in Tennessee who suspects the fiduciaries of their retirement plans are not in compliance with ERISA regulations can seek the advice of an attorney. With the experience and guidance of a legal professional, plan participants will know the best course of action to protect their investments.

Source: plansponsor.com, "Self-Dealing Suit Filed Against Mutual of Omaha", Rebecca Moore, Jan. 30, 2018

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