Principal Subsidiaries Can’t End Target Date Fee Challenge

Principal Global Investors and other subsidiaries of Principal Financial lost their bid to dismiss a proposed class action challenging the fees charged by target date funds the company offers retirement plans.

The lawsuit, filed on behalf of investors in about 9,000 retirement plans that contract with Principal, stated valid fiduciary breach claims under the Employee Retirement Income Security Act, Judge Stephanie M. Rose of the U.S. District Court for the Southern District of Iowa ruled Jan. 24.

The case centers on target date funds, which are investments tied to an individual’s expected retirement date. The funds’ underlying investments turn ...