June 27, 2023
A group of current and former New York Life Insurance Co. workers asked for class status in their New York federal court lawsuit alleging the insurance giant retained underperforming proprietary investment funds in two retirement plans, arguing that their claims can be litigated in one fell swoop.
The employees said Monday that their Employee Retirement Income Security Act suit against the insurance giant and its investment committee targets practices that commonly affected the plans, which at the end of 2021 had more than $5 billion in assets and 29,000 participants. They said the plans’ trustees engaged in self-dealing, failed to replace lackluster New York Life proprietary mutual funds and improperly established a fixed-dollar account as an investment default.
“Although defendants swim against the tide and resist class certification here, they have no reasonable basis for challenging the relevant Rule 23 criteria,” the employees said, referring to the requirements under the Federal Rules of Civil Procedure to obtain class status.
The group of workers sued New York Life in March 2021. They alleged that the company breached its fiduciary duties by retaining its proprietary MainStay Funds in the plan, despite warnings from its outside investment consultants that the investment options did not hit their benchmarks. The company also breached its fiduciary duties by retaining a fixed-dollar account that was set as the plans’ default investment option if participants did not select their own investment options, the workers said.
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The workers are represented by Michelle C. Yau, Michael Eisenkraft, Kai Richter, Daniel R. Sutter, Jacob T. Schutz, Eleanor Frisch and Caroline E. Bressman of Cohen Milstein Sellers & Toll PLLC.