Firstrust Savings Bank Must Defend 401(k) Plan’s Cash-Like Fund

A former Firstrust Savings Bank employee advanced his proposed class action accusing the Pennsylvania-based bank of wrongly foisting its own low-yield certificates of deposit on workers’ retirement savings.

Firstrust may have acted imprudently and disloyally under the Employee Retirement Income Security Act by requiring that the money it contributes to workers’ retirement accounts be invested in proprietary certificates of deposit that produced paltry returns, Judge Chad F. Kenney said Monday for the US District Court for the Eastern District of Pennsylvania. Kenney credited allegations that this practice allowed Firstrust to earn about $460,000 per year off its $80 million 401(k) ...