Transamerica ERISA Class Action

Case Type: ERISA

Company Name: Transamerica

UPDATE: A federal court granted class certification in a class action case filed by Sanford Heisler Sharp against the Transamerica Corporation for violating basic fiduciary duties under ERISA and abusing its employees’ trust by mismanaging their retirement funds. The December 2019 Complaint alleges that Transamerica invested employees’ retirement savings in multiple funds that consistently underperformed their investment benchmarks and other similar collective investment funds.

Charles Field, partner at Sanford Heisler Sharp and lead counsel for the plaintiff class said, “Sanford Heisler Sharp has achieved class certification in a nationwide ERISA class action. Plan participants allege that Transamerica wasted millions of its employees’ retirement savings by failing to remove poorly performing Transamerica funds from the plan. Sanford Heisler has pioneered a line of ERISA investment performance cases on behalf of hundreds of thousands of employees. Now that the Court has certified the class, Sanford Heisler can proceed to the merits of the case.”

Sanford Heisler Sharp filed a class action complaint on December 28th in the U.S. District Court of Northern Iowa detailing the ways in which the Transamerica Corporation violates basic fiduciary duties under ERISA and abuses its employees’ trust by mismanaging their retirement funds. The complaint alleges the company invests employees’ retirement savings in multiple funds that consistently underperform their investment benchmarks and other similar collective investment funds. The consequences to employees are substantial: the Transamerica 401(k) Plan has cost its employees millions of dollars in retirement savings.

Plaintiffs Jeremy Karg, Matthew R. LaMarche, and Shirley Rhodes each filed the case individually and as representatives of approximately 17,000 Plan participants in Transamerica Corporation’s $1.7 billion 401(k) Plan (“Plan”). Named as Defendants are the Transamerica Corporation and the committees and their members that provide investment advice and services to the Plan.

David Sanford, chairman of Sanford Heisler Sharp and counsel for Plaintiffs and the proposed class, noted, “ERISA’s fiduciary standards are strict and exacting. Transamerica retained too many poor-performing investment options on the Plan which were highly detrimental to the retirement savings of Plan participants. Transamerica and the committees should be held to the highest standard as fiduciaries; but in this case they fall below the lowest standard.”

The complaint describes how thousands of Transamerica employees and former employees invest hundreds of millions of dollars in the company’s Plan. Given the company’s investment sophistication and extensive assets, employees trust Transamerica to construct a stellar retirement plan. Yet, according to the complaint, Transamerica saddled the Plan’s participants with substandard investment options that were managed by a Transamerica affiliate, Transamerica Asset Management. Accordingly, Plaintiffs claim, Transamerica fails to prudently select investment options and monitor their performance as required by ERISA. As a result, Transamerica causes the Plan, and its participants, to suffer staggering losses.

Charles Field, a partner at Sanford Heisler and counsel for Plaintiffs and the proposed class, added, “As a fiduciary to the Plan, Transamerica is obligated to monitor its Plan to ensure the Plan’s investments are prudent. Transamerica neglected these sacrosanct duties.”

Plaintiffs and the class seek compensation for financial losses to Plan participants and beneficiaries resulting from the Plan’s underperforming investments; divestiture of imprudent investments; and the removal of the fiduciaries who have violated their duties to the Plan’s participants and beneficiaries under ERISA.