A potentially sweeping class action suit involving the construction of target-date funds involving “hundreds of thousands" of retirement plan participants has been dropped.
In a brief, almost terse, joint stipulation (Nelsen et al. v. Principal Global Investors Trust Co. et al., case number 4:18-cv-00115), Nichols Kaster, PLLP (which represented the plaintiffs in the case), told the court that:
“Plaintiffs Ashley Nelsen, Roody Jasmin, and Joellyn Williams and Defendants Principal Global Investors Trust Company, Delaware Charter Guarantee & Trust Company d/b/a Principal Trust Company, Principal Global Investors, LLC, and Principal Management Corporation hereby stipulate and agree to the voluntary dismissal of this lawsuit, with prejudice, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), with each party bearing its own attorney’s fees and costs. Plaintiffs and Defendants further stipulate that this dismissal is not the result of any settlement, compromise or payment of any consideration to Plaintiffs.”
Case ‘Course’
The suit, filed in April 2018, alleged that Principal had relied on proprietary funds in constructing a series of collective investment trust target-date funds, enriching the firm and its affiliates at the expense of participants who they say would have been better served by other funds.
Since that time U.S. District Judge Stephanie M. Rose had rebuffed Principal’s June 2018 motion to dismiss, but six months later tossed some of the claims (some were barred by the statute of limitations, and she held that the defendants weren’t fiduciaries to the plans in question when the investments were picked), but noted that the plaintiffs had sufficiently presented arguments that the defendants breached their ERISA duty to monitor the underlying investments.
Roughly a year ago, the plaintiffs requested certification for a class of “hundreds of thousands” of retirement plan participants—those who participated from April 16, 2012, onward in certain 401(k) plans and invested in the Principal LifeTime Hybrid Collective Investment Funds.
A trial date had been set for February 2021.
But now the parties have apparently dropped the matter. With a whimper, not a bang.
