Cutrone v. The Allstate Corp., Case No. 1:20-cv-06463 (N.D. Ill.)
Our firm, along with Scott + Scott Attorneys at Law LLP, Sanford Heisler Sharp LLP, and Barnow & Associates PC, has brought a class complaint in the U.S. District Court of Northern Illinois alleging that Allstate Corporation, along with its retirement plan committees and members, breached their fiduciary duties under ERISA by mismanaging their retirement funds. The case is Cutrone v. The Allstate Corp., Case No. 1:20-cv-06463 (N.D. Ill.).
Specifically, Allstate selected and failed to remove from its employee retirement plan a group of consistently underperforming Northern Trust target retirement date funds, resulting in tens of millions of dollars in lost retirement savings to Allstate current and past employees.
Plaintiffs claim that the Northern Trust Focus Target Retirement Trusts performed worse than 70% to 90% of their peer funds for nearly a decade, and consistently failed to meet their benchmark indexes since they were introduced in 2010.
The complaint further alleges that Allstate allowed participants to be charged advisory fees that were much higher than those charged by competitors.
On September 30, 2021, the federal court denied Allstate’s motion to dismiss the complaint. Judge Manish S. Shah stated in his order, “Plaintiffs allege breaches of duty that harmed them, and that opens the courthouse door.”
Conlon v. The Northern Trust Company, Case No. 21-cv-02940 (N.D. Ill.)
Separately, our firm, along with Scott + Scott Attorneys at Law LLP and Peiffer Wolf Carr Kane & Conway, LLP, has also filed a class complaint against The Northern Trust Company, claiming that Northern Trust and its retirement plan committee and members likewise breached their ERISA fiduciary duties, including by selecting and maintaining its proprietary Northern Trust Focus Target Retirement Trusts in the retirement plan, causing millions of dollars of lost retirement savings to participants and beneficiaries of the Northern Trust Company Thrift-Incentive Plan. That case is Conlon v. The Northern Trust Company, Case No. 21-cv-02940 (N.D. Ill.).
On August 5, 2022, the federal court denied The Northern Trust Company’s motion to dismiss the complaint. Regarding the plaintiffs’ claims of fiduciary disloyalty, Judge Charles R. Norgle Sr. stated, “The Focus Funds—the only target date funds offered in the Plan and the default fund option for all Plan participants —were proprietary funds, which is circumstantial evidence that Defendants were self-interested and purposefully imprudent to the detriment of Plan beneficiaries.”
Recent developments in this matter have been covered in the news: “Northern Trust Must Face Suit Over 401(k) Plan’s In-House Funds,” Bloomberg Law, August 10, 2022.
If you are a current or past participant or beneficiary of the Allstate or Northern Trust retirement plans who invested in any Northern Trust target retirement date fund from 2014 to the present, and would like to learn more about these cases, contact Mike Mulder.
