Principal Life Can’t Shake All Claims of Wrongful 401(k) Payout

Principal Life Insurance Co. must face portions of a lawsuit saying it improperly distributed a 401(k) account worth more than $1.3 million to the wrong beneficiaries.

The plaintiff, the estate of the deceased account holder, sufficiently alleged that Principal acted with enough authority to qualify as a plan fiduciary subject to liability under the Employee Retirement Income Security Act, Magistrate Judge Herman N. Johnson Jr. of the US District Court for the Northern District of Alabama said Thursday. Principal allegedly “contravened” directives from the plan sponsor and failed to correct the disputed distribution, which suggests the company “exercised an inclination ...