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.

Latest News

Advisor moves: NY-based Coastline wealth adds three teams with over $430M in assets
Advisor moves: NY-based Coastline wealth adds three teams with over $430M in assets

Raymond James also lured another ex-Edward Jones advisor in South Carolina, while LPL welcomed a mother-and-son team from Edward Jones and Thrivent.

Fintech bytes: Vestwell comes through for underserved savers with multilingual support
Fintech bytes: Vestwell comes through for underserved savers with multilingual support

MyVest and Vestmark have also unveiled strategic partnerships aimed at helping advisors and RIAs bring personalization to more clients.

UBS profit beats estimates as Ermotti sees brighter outlook
UBS profit beats estimates as Ermotti sees brighter outlook

Wealth management unit sees inflows of $23 billion.

Evercore to buy advisory firm Robey Warshaw for $196 million
Evercore to buy advisory firm Robey Warshaw for $196 million

Deal will give US investment bank a foothold in lucrative European market.

Gates and Buffett’s Giving Pledge is 15 years old, but many signatories are richer than ever
Gates and Buffett’s Giving Pledge is 15 years old, but many signatories are richer than ever

New report examines the impact that the initiative has had on philanthropy.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.