"How does it make sense to say that if you are a dollar over-funded, there is no risk of harm to the participants, but if you are a dollar under-funded, there is risk of harm or wrongdoing? It’s an illogical way to analyze this issue,” the attorney said.
The complaint suggests Transamerica continued to offer proprietary portfolios when their rates of return were meaningfully below stated long-term benchmarks.
According to the lead plaintiff, the DC plan in question offers only investment options that generate fees for SEI and its affiliates and treat the plan as a captive customer.
The rise in lawsuits is prompting more sponsors to turn to lower-cost index funds—and could prevent them from offering lifetime income products.