A class-action lawsuit filed by MassMutual employees against the insurer claiming breach of fiduciary duty is the latest salvo against management of 401(k) plans and might have broader consequences than previous litigation.
Besides claiming MassMutual,which is located in Springfield, Mass., charged excessive fees and engaged in self-dealing by limiting investment options almost exclusively to its own products, the suit alleges that the firm's CEO, Roger Crandall, controls the group annuity contract that offers the Fixed Interest Account that invests in a general fund. That fund has $500 million invested in it.
There have been more than 30 lawsuits filed against 401(k) sponsors in the past few years. Many have been settled out of court, including one earlier this year against Cigna.
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