ERISA Complaint Alleges Mismanaged Plan Cost Participants $100M

Two former employees have filed a complaint on behalf of plan participants against Nokia North America, alleging that the company cost employees more than $100 million by mishandling the plan’s investments. 

In the case, filed in U.S. District Court for the District of New Jersey, the plaintiffs allege that Nokia and its investment committee failed to replace underperforming funds from its 401(k) plans in violation of their fiduciary duties under the Employee Retirement Income Security Act of 1974.  

The complaint alleges that two funds offered in the plan—the U.S. Large Cap Growth Equity Fund and the International Equity Fund—underperformed for years, but the investment options were never replaced.  

The complaint states that the Large Cap Fund underperformed its Russell 1000 Growth benchmark in eight of the last nine years, whereas similar investments had outperformed the fund and its benchmark. Despite the underperformance, the complaint states that the defendants continued to invest in the fund instead of removing it. The fund was ultimately removed in May, but the complaint states that removing the fund “does not cure the Nokia Defendants’ failure to remove it from the Plan by 2019 at the latest.” 

The complaint makes similar allegations concerning the International Equity Fund, which it says underperformed its benchmark in six of the last nine years. Thus, the complaint alleges that Nokia’s retirement plan violated ERISA on three counts: breaching its fiduciary duty of prudence, failing to monitor delegated fiduciaries and breaching fiduciary co-duties.  

Nokia’s savings plan had more than $9.8 billion in assets, with 26,582 participants, as of 2024, according to its latest Form 5500.