A BestWire news report said Jefferson County Circuit Judge Howard F. Bryan will consider requests to throw out the suit filed by Ruth A. Gwin and Sandra H. Turner who have asked that the case be declared a class action to represent all of the approximately 12,000 participants in the state DC plan.
Named as defendant in addition to Nationwide Life were the Alabama State Employees Association and PEBCO Inc., a unit of the association that performs some of the employee group’s fiduciary duties, according to the news report. The association is a plan fiduciary.
The suit alleges the payments reflected on the employee association’s federal tax filings for 2004 to 2006 of at least $3.2 million were “improper” while the plan service provider negotiations were ongoing.
According to the plaintiffs, Nationwide charges “contract expenses” and benefits by deducting these expenses from plan participants’ accounts. Based on the variable annuity contract Nationwide issued to provide services to the plan, the plaintiffs contend the amount of these expenses is not related to the investment options from which the plan participants can choose, such as mutual funds, the news report said.
Erica Lewis, a Nationwide spokeswoman, said the company strongly disagrees with the allegations and intends to aggressively defend the case. She added that Nationwide was selected to offer retirement products and services in Alabama based on a competitive bidding process that was conducted by Aon.