Cigna Sued by 401(k) Plan Participants Over Forfeiture Usage (1)

Cigna Group mismanages its employees’ 401(k) plan by using the money forfeited by departing workers for its own benefit, three plan participants alleged in a proposed class action complaint.

Cigna “consistently and reflexively” chose to use 401(k) forfeitures to reduce the amounts it would otherwise have to contribute to the plan, instead of using this money to reduce the administrative expenses charged to workers, the participants said.

These missteps cost the plan at least $17 million and constituted a breach of fiduciary duty and a prohibited transaction under the Employee Retirement Income Security Act, according to a complaint filed Tuesday ...