Walgreens hit with $300 million 401(k) lawsuit over target-date funds

Walgreens hit with $300 million 401(k) lawsuit over target-date funds
Plaintiffs claim the Northern Trust funds led to a 'swift and devastating blow' to participants' retirement savings.
AUG 12, 2019

Walgreen Co. has been hit with a lawsuit alleging its "imprudent" decision to keep certain target-date funds in its 401(k) plan caused employees to lose $300 million in cumulative retirement savings. The lawsuit, brought by 12 current and former participants in the $10.3 billion Walgreen Profit-Sharing Retirement Plan, claims the pharmacy chain "loaded" its 401(k) plan with a suite of poorly performing TDFs, the Northern Trust Focus Target Retirement Trusts. (More: Cross-selling gaining prominence in retirement-plan lawsuits) Fiduciaries to the Walgreens retirement plan had a "deficient" investment selection and monitoring process, according to the lawsuit, Brown-Davis et al v. Walgreen Co. et al. The funds already had a history of underperformance when added to the plan in 2013 and have continued to underperform through the present relative to industry benchmarks and comparable funds offered by peers, plaintiffs claim. [Recommended video: Identifying adviser rollover opportunities] "Walgreen's decision to select the Northern Trust Funds resulted in a swift and devastating blow to participants' retirement accounts," according to the lawsuit, filed Aug. 9 in Illinois federal court. Margaret Sheehan, a Walgreens spokeswoman, declined to comment because of pending litigation. Doug Holt, a spokesman for Northern Trust, also declined to comment. (More: 401(k) lawsuits creeping down to smaller plans) Plaintiffs are seeking $300 million to make good on what they claim to be total losses incurred by the 401(k) plan from Jan. 1, 2014 through the present.

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