Firstrust Savings Bank Sued Over 401(k) Plan’s Cash Holdings

Pennsylvania-based Firstrust Savings Bank was sued Friday by a former employee who says workers are improperly forced to invest part of their retirement savings in the bank’s own low-yield certificates of deposit.

Firstrust mandates that the contributions it makes to employees’ 401(k) accounts be invested in its proprietary certificates of deposit and savings accounts, the employee alleged in a proposed class complaint. These vehicles, which are the plan’s largest holding, are inappropriate for long-term retirement savers because they produce paltry returns that failed to keep pace with inflation, causing the plan to lose out on millions of dollars in ...