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Allstate Employees Sue Allstate Corporation Regarding Fiduciary Duties

Allstate Employees sue Allstate Corporation and their 401k plans, alleging breach of fiduciary duties. The suit is based on the alleged poor performance of investment selections and expenses incurred. The case involves investments in six of the Focus Funds. The suit includes allegations against the plan fiduciary duties to diversify the investments of the plan to minimize the risk of large losses. Allstate representatives claim that plan fiduciaries must engage with a balancing of risks and returns, which is a function of portfolio management.

The plaintiffs allege that the Northern Trust Funds “consistently underperform” against the Morgan Stanley funds, which has drastically understated the value of company retirement savings plans. Allstate currently is defending the lawsuit, calming that the plaintiffs failed to exhaust administrative remedies before seeking resolution through litigation. Allstate raises questions about whether their 401k committee and their 401k administrative committee acted as fiduciaries concerning the conduct of which the plaintiffs complain. The case also revolves in a central fashion around the Employee Retirement Income Security Act of 1974 (ERISA), which the plaintiffs believe should have mandated Allstate to choose wiser and more lucrative investment options. Allstate, by contrast, believes that this case is a non-starter and is a matter of not losses, but complaints that there could have been more financial gain.

Mehr Fairbanks Trial Lawyers represent claimants in ERISA plans.

Dictated by Austin Mehr

Edited by Iain Feeney

Mehr Fairbanks Trial Lawyers

June 2021

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