Katherine Cutrone became the lead plaintiff in a class action lawsuit against her former employer, Allstate Corp. (Allstate). Cutrone filed the class action complaint last alleging current and former employees have lost more than $65 million in retirement savings because “Allstate failed to remove a suite of underperforming investment funds from its retirement plan.” Cutrone claims Allstate violated the Employee Retirement Income Security Act (ERISA).
“Defendants breached their fiduciary duties by failing to prudently select and monitor the [retirement] plan’s investment options. Specifically, they loaded the plan with poorly performing targeted retirement-age funds called the Northern Trust Focus Target Retirement Trusts and then kept these Funds on the Plan’s investment menu throughout the class period despite their continued underperformance,” a portion of Cutrone’s class action complaint reads.
The Northern Trust Focus Target Retirement Trusts have performed worse than 70% to 90% of its peer funds for nearly a decade, according to Cutrone. The funds have also consistently failed to meet their benchmark indexes since Northern Star launched them in 2010, according to the class action complaint.
Allstate’s plan provides retirement income for current employees, former employees and beneficiaries. Cutrone stated the insurance company has more than $5 billion in assets under management, with more than $763 million being invested among 11 Northern Trust funds.
Cutrone asked the presiding judge to order that Allstate make good on the losses it has caused her and similarly situated plan participants, disgorge any profits the company made by allegedly breaching its fiduciary duties and reform the plan to include “only prudent investments,” among other requests.