AIG Unit Beats Would-be Class Suit Over 401(k) Surrender Charge

AIG subsidiary Variable Annuity Life Insurance Co. defeated litigation over its practice of charging surrender fees to 401(k) plans leaving its platform, when a Texas federal judge ruled the company didn’t act as an ERISA fiduciary when collecting this fee.

VALIC’s collection of a predetermined fee set forth in its customer contract isn’t a discretionary act giving rise to fiduciary liability under the Employee Retirement Income Security Act, Judge Sim Lake of the US District Court for the Southern District of Texas said Wednesday. Collecting fees at stated levels is “not an exercise of ‘discretion’ except in the most formal ...