Hale and Novak v. Asurion
Case 3:26-cv-01222
United States District Court, Middle District of Tennessee, Nashville Division
Plaintiffs allege that a tech insurance company saddles its employees’ retirement savings with excessive administrative fees, including both direct and indirect fees.
Background
The Complaint alleged that Defendant Asurion, LLC (“Asurion”) created a 401(k) plan (“Plan”), a defined contribution plan in which plaintiffs Kristin Hale and Heather Novak were participants. Asurion serves as the plan administrator and primary fiduciary. Asurion delegated its investment duties to an internal committee (“Board”). Asurion and the Board are required to act with care, skill, prudence, and diligence as plan fiduciaries. Plaintiffs allege that Asurion and the Board fell short by making imprudent investment choices and allowing the Plan to pay excessive fees to insiders.
As of December 31, 2024, the Plan held approximately $733 million in total assets and served 11,143 participants, the Complaint says.
ERISA plans require basic recordkeeping and administrative (“RKA”) services, including maintaining sub-accounts for each participant, providing account statements, assisting in the payment of benefits, etc. Defendants hired Principal Life Insurance Company and Principal Trust Company (collectively “Principal”) to provide RKA services and serve as the Plan’s trustee. Asurion and the Board caused the Plan to directly pay more than double the market rate for Principal’s RKA services, according to the Complaint. Plaintiffs allege that at times, the Plan paid over $100 per participant in direct RKA fees to Principal.
Asurion and the Board also caused the Plan to channel about $444.5 million of its assets into the Principal LifeTime Hybrid Collective Investment Trusts (“Principal TDFs”), and another $4 million in a Small Cap Growth I separate account offered by Principal, the Complaint alleges. Plaintiffs say that these and other transactions provided indirect compensation to Principal.
According to the Complaint, from 2009 through the present, Asurion and the Board caused approximately 61% of the Plan’s assets to be invested in the Principal TDFs.
Plaintiffs and class members seek recovery of losses to the Plans, including the difference between the value of their accounts as they exist today, or as of the date of distribution, and the value those accounts would hold absent Defendants’ breaches of duty.
Bryson attorneys: Mark Silvey, Jimmy Mintz and Jim DeMay