New York Life 401(k) participants get a $14 Million in Self-Dealing Case

By March 11, 2008401(K) Litigation

A claim that New York Life Insurance Co. improperly transferred pension and 401(k) assets into its mutual fund is almost over.
On March 4, Judge Bruce W. Kauffman of the U.S. District Court for the Eastern District of Pennsylvania approved a $14 million settlement between the company and employees and agents who were in the New York Life defined benefit and 401(k) program.
The employees and agents claimed that the company improperly invested pension and 401(k) assets. Instead of investing in separately managed accounts, the Board of Trustees chose New York Life’s Mainstay Institutional Mutual Funds. The participants alleged that as a result, excessive management and investment fees were paid.
The settlement terms stipulate that $9.8 million plus interest will be distributed to 401(k) participants who had an account between Jan. 1, 1994 and Dec. 31, 2005. The remaining $4.2 million will be allocated between the Employee Pension Plan, the Agent Pension Plans, and attorneys’ fees and costs.
The ruling was issued in Mehling v. New York Life Insurance Co., E.D. Pa., No. 99-5417.