AXIS INSURANCE SERVICES, LLC: Fiduciary Liability Claims Scenarios

Employees were provided an option to invest in a guaranteed investment, which was backed by a poorly performing insurance company. The employees sued the plan fiduciaries alleging that they breached their fiduciary duties by offering this option and their duty of disclosure by providing misleading or incomplete communications. The case resulted in a $3,250,000 settlement.

An employee was given their spouse’s retirement funds using a signed spousal release form, which the plan administrator had improperly notarized. The spouse claimed the plan participant forged the signature on the spousal release form. The spouse of the employee sued the plan administrator and the sponsor organization for the spousal pension rights. The case awarded the spouse a $400,000 settlement.

An employee had announced plans to retire and requested for a pension calculation in writing but the plan administrator took over 45 days to value the plan assets. During that time there was a major drop in the stock market, which had a negative impact on the value of the retirement funds. The retired employee sued the plan administrator and the pension plan alleging an error in administration and a miscalculation of plan benefits. The case resulted in an $80,000 settlement.

A group of a company’s current and retired female employees claimed that their pension plans failed to account for maternity leave when calculating time in active service. The group formed a class action claim and sued the plan administrator, the plan, and sponsor organization. The case exceeded $2,500,000 in settlement and defense costs.

These are only claims examples: Minor changes from actual suits have been made to protect the confidentiality of all clients.