Illinois Tool Works Ordered to Defend 401(k) Forfeiture Claims

A lawsuit accusing Illinois Tool Works Inc. of mishandling forfeited contributions in its 401(k) plan is moving forward after a federal judge on Monday greenlit claims of fiduciary disloyalty under ERISA.

Illinois Tool’s retirement plan document gives the company discretion over how to use 401(k) forfeitures, and the company may have acted disloyally by putting these forfeitures toward its required plan contributions instead of using them to lower costs, Judge Sunil R. Harjani said. The lawsuit claims the company defendants “acted with an eye towards themselves rather than Plan participants,” which is enough to state a disloyalty claim under the ...