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Judge Approves Proposed Class in Lawsuit Against Transamerica
California Federal Judge Dean D. Pregerson denied a motion filed by Transamerica Life Insurance Co. (TLIC) to strike class allegations which challenge the fees the company charges Section 401(k) plans. The court ruled that Employee Retirement Income Security Act (ERISA) plaintiffs are not required to name every named fiduciary of the relevant ERISA plan as defendants in order to litigate fiduciary breach claims against certain plan fiduciaries.
The plaintiffs proposed a class consisting of all ERISA-governed plans that held group annuity contracts with TLIC and on behalf of the participants and beneficiaries of those plans. TLIC argued that the class should be limited to only those plans in which the named plaintiffs participated, along with the participants and beneficiaries of such plans.
The complaint specifically accused TLIC of charging “excessive” fees on “publicly available mutual funds.” TLIC fees were deemed excessive because TLIC “provides no services on such accounts: the underlying mutual funds’ investment management fees covered ‘all of the necessary investment management/advisory services needed for the mutual fund.”