Jackson National Life Insurance Co. has reached a $4.5 million settlement in a self-dealing lawsuit that alleged the company profited at the expense of its employees by adding high-cost proprietary investment funds to its 401(k) plan.
The settlement amount is just shy of half the plaintiff's total estimated damages in the class-action lawsuit, Becky A. Matthews Pease v. Jackson National Life Insurance Co., according to a court filing on Nov. 1. The parties still need court approval for the settlement.
The lawsuit, originally filed in March 2017 in Michigan district court, is one of several recent self-dealing cases involving financial services companies and their retirement plans. It also comes amid a broader wave of litigation targeting retirement-plan sponsors and their service providers, a trend that began about 12 years ago but has gained momentum in the past few years.
The self-dealing lawsuits have shown mixed results to date. Some courts have found in favor of defendants, including litigation involving Capital Group, Wells Fargo & Co. and Putnam Investments. Several firms have settled, including Deutsche Bank, Allianz, Citigroup Inc., TIAA and New York Life Insurance Co.