Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Sept. 14 — A new lawsuit accuses Continental Casualty Co. of mismanaging its 401(k) plan by canceling an in-house group annuity contract that provided employees with a generous guaranteed interest rate of 4 percent ( Dolins v. Continental Casualty Co. , N.D. Ill., No. 1:16-cv-08898, complaint filed 9/14/16 ).
The lawsuit, filed Sept. 14 in the U.S. District Court for the Northern District of Illinois, says that Continental canceled the contract in order to increase its own profits and appear more attractive to potential buyers, regardless of the negative effect it had on employees’ investments. The cancellation of the contract—which was offered by a Continental subsidiary—also caused employees to pay higher administrative fees, the lawsuit contends.
According to the lawsuit, nearly one-third of the billion-dollar plan’s assets have been invested in the guaranteed contract at various points. After the contract was canceled in 2011, employees saw their guaranteed 4 percent return drop to 1.54 percent by 2015, the lawsuit alleges.
Jerrold Dolins, the former CNA Financial Corp. employee who sued multiple Continental affiliates over the cancellation, allegedly invested 100 percent of his 401(k) assets in the fund associated with the annuity contract. He seeks to represent a proposed class of all the plan participants who invested in the contract since 2012, a class he claims includes up to 10,000 people.
Continental didn’t immediately respond to Bloomberg BNA’s request for comment.
Dolins is represented by Keller Rohrback LLP and Levun Goodman & Cohen LLP.
To contact the reporter on this story: Jacklyn Wille in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
Text of the complaint is at http://www.bloomberglaw.com/public/document/Dolins_et_al_v_Continental_Casualty_Company_Docket_No_116cv08898_.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)