New York Life Defends 401(k) Plans’ Affiliated Stable Value Fund

New York Life Insurance Co. defended its retirement plans from allegations of self-dealing, telling a Manhattan federal judge that a recent proposed class action takes aim at a well-performing stable value fund with returns that “far exceed” those of similar funds across the country.

Stuart Krohnengold’s lawsuit accuses the insurer of defaulting certain retirement plan participants into an undiversified general account insurance fund called the Fixed Dollar Account, which Krohnengold says allows the company to earn enormous profits while exposing workers’ retirement savings to its credit risk. But Krohnengold uses “wildly inappropriate” comparison funds to challenge the Fixed Dollar Account ...