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New York Life Sued Over 401(k) In-House Funds, Default Option

March 2, 2021, 5:27 PM

New York Life Insurance Co. was sued Tuesday by a former employee who says the company engages in self-dealing and earns “windfall profits” from a pair of retirement plans covering tens of thousands of employees and insurance agents, according to a proposed class action filed in federal court in Manhattan.

Stuart Krohnengold’s lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses the insurer of improperly profiting off its workers’ retirement savings by defaulting certain retirement plan participants into an undiversified general account insurance fund. This fund—called the Fixed Dollar Account—isn’t a permissible 401(k) default...

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