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Northern Trust agrees to pay $6.9M over ‘underperforming’ target date funds lawsuit

Participants in the firm’s $2.9 billion 401(k) plan had sued the company, alleging it failed to regularly monitor plan investments and remove underperforming in-house funds.

By Lynn Cavanaugh | January 09, 2025 at 10:45 AM
LONDON – November 4, 2020: Northern Trust logo and sign at the top of the 50 Bank Street Northern Trust building, Canary Wharf. Credit: Dave Cooil/Adobe Stock

With an uptick in 401(k) mismanagement lawsuits in the last year, one firm, Northern Trust, has agreed to pay $6.9 million to settle a class action lawsuit by employees challenging the use of the financial service firm’s in-house “underperforming” target-date funds for its 401(k) plan. Plan participants sued the firm and its fiduciaries for violating federal law by failing to monitor the plan investments, most notably the proprietary TDF funds.

The settlement agreement in Conlon et al v. The Northern Trust Co. et al., was filed on Monday in the U.S. District Court for the Northern District of Illinois, and is still pending court approval.

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