Allstate sued again over target-dates, managed accounts in 401(k)

The company was already targeted in another class-action case over the target-date series and managed account options in its plan

Allstate is facing a second lawsuit over its 401(k), with a plaintiff’s law firm alleging on Monday that company breached its fiduciary duties in connection with the plan’s target-date series and managed accounts.

Like the existing case, the new class-action lawsuit was filed in U.S. District Court for the Northern District of Illinois Eastern Division.

Plaintiffs in the new case are asking for $70 million in restitution for the alleged losses from excessive investment management fees and underperformance.

Similarly to the case brought in late October by different law firms, the plaintiffs allege shortcomings in the Northern Trust target-date collective investment trust, including instances of lower returns and higher fees relative to peers.

The law firm that sued Allstate in October also brought a separate case against Northern Trust. Northern Trust is not named as a defendant in the recently filed case.

The Allstate plan has included the Northern Trust target-date CITs on its menu since at least 2011, according to the complaint. About $700 million of the total $6 billion in assets in the plan are invested in the series, the plaintiffs’ lawyers wrote. The plan includes about 44,000 participants.

The complaint also alleges that “Allstate’s retention of Financial Engines and [Alight Financial Advisors] caused the participants to pay significantly excessive investment advisory fees and suffer poor relative performance.” Those managed account providers are not named in the suit.

Law firms Barnow and Associates and Sanford Heisler Sharp brought the recent case.

Allstate did not respond to a request for comment by publication time, and Northern Trust declined to comment.