Former employees of Swiss Re American Holding Corp. are suing the company and its recordkeeper, Empower, for breaching their fiduciary duties under the Employee Retirement Income Security Act (ERISA). The plaintiffs allege that they were charged excessive recordkeeping fees, faced imprudent investment decisions, and experienced the misuse of forfeiture funds.
In the case of Rusadill et al. v. Swiss Re American Holding Corp. et al. (SDNY), Empower is accused of providing improper rollover recommendations and using participant data for cross-selling activities. According to the plan’s most recent Form 5500 filing, the Swiss Re Group U.S. Employees’ Savings Plan had over 4,000 participants with account balances and assets totaling approximately $1.45 billion. The participants further allege that Empower used their data to promote its own Roth Individual Retirement Accounts (IRAs). Additionally, Empower is accused of concealing conflicts of interest among its employees, who were allegedly pressured to falsely assert that their recommendations were “personalized.” The plaintiffs claim Empower’s bonus structure incentivized employees to recommend its Roth IRAs to participants leaving the plan.
The complaint also states that Swiss Re failed to prevent Empower’s cross-selling activities by not requiring Empower to sign a non-solicitation agreement. Furthermore, the former participants contend that Swiss Re fiduciaries violated their duties under ERISA by allowing the plan to incur excessive recordkeeping fees—more than seven times the average fee for plans of similar size.
