Transamerica To Pay $3.8M For Excessive Fees

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Transamerica To Pay $3.8M For Excessive Fees

Transamerica has agreed to settle an excessive-fee lawsuit with its employees who participated in its 401(k) plan for $3.8 million.

The Plaintiffs in the case allege that Transamerica and its affiliates breached their fiduciary duty under the Employee Retirement Income Security Act of 1974 for charging excessive administrative and investment management fees.

Transamerica serves as record keeper and investment manager for its $1.6 billion 401(k) plan. It allegedly administered the plan “for the benefit of Aegon,” the firm’s parent company, and acquired excessive fees for itself through revenue sharing payments, stated the complaint filed in February of last year.

Judge Edward McManus of the U.S. District Court for the Northern District of Iowa, Cedar Rapids Division, granted preliminary approval of the settlement last week.

The settlement also includes a number of non-monetary provisions. These include capping fees on a bond index mutual fund, S&P 500 fund and separate account investments; hiring a third-party investment consultant; and continuing to rebate all mutual fund revenue sharing to the plan, to rebate any sub-adviser fees for affiliated sub-advisers to the plan, and to provide record-keeping services to the plan at no cost.

Transamerica is merely the latest in an expanding list of retirement plan service providers that have been the subject of similar excessive-fee lawsuits by their plan participants. Earlier this month, Massachusetts Mutual Life Insurance Co. agreed to a $31 million settlement with its employees. Fidelity Investments and Ameriprise Financial have also paid $12 million and $27.5 million respectively. Lockheed Martin Corp. paid $62 million, the most paid by a company to date in this string of lawsuits.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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