Newark, NJ — A federal judge in New Jersey dismissed a proposed class-action lawsuit accusing Equitable Financial Life Insurance Company and its retirement plan committees of mismanaging a multibillion-dollar 401(k) plan, ruling the plaintiff failed to plausibly show violations of federal retirement law.
In a May 19 opinion, U.S. District Judge Michael E. Semper granted a motion to dismiss claims brought by Maine resident Hollis Tedford, who sued on behalf of participants in the Equitable 401(k) Plan under the Employee Retirement Income Security Act of 1974, commonly known as ERISA.
The lawsuit alleged Equitable and its plan committees breached fiduciary duties by allowing allegedly imprudent investment options and engaging in prohibited transactions tied to the administration of the company’s retirement plan.
Judge Semper dismissed the amended complaint without prejudice, allowing the plaintiff the opportunity to potentially refile revised claims.
Lawsuit Targeted One of Nation’s Largest 401(k) Plans
According to court filings, the Equitable 401(k) Plan held more than $2 billion in assets between 2019 and 2023 and included more than 12,000 participants with account balances.
Tedford argued the plan’s size should have allowed fiduciaries to secure lower-cost investment structures and more favorable terms for participants.
The complaint accused Equitable, the Benefits Administrative Committee, and the Investment Committee of violating ERISA through:
- Alleged breaches of fiduciary duty
- Failure to monitor plan fiduciaries
- Alleged prohibited transactions involving plan management
The plaintiff sought to represent a broader class of similarly situated retirement plan participants.
Key Points
• A federal judge dismissed an ERISA lawsuit against Equitable’s $2 billion 401(k) plan
• The complaint alleged fiduciary breaches and prohibited transactions tied to plan investments
• The dismissal was issued without prejudice, allowing possible amended claims later
Judge Semper’s opinion focused on whether the plaintiff adequately supported allegations that the plan’s fiduciaries acted imprudently under ERISA standards.
The court found the amended complaint failed to provide enough factual detail to plausibly establish that the challenged investment decisions or fees violated federal law.
Court Examined Complex Retirement Investment Claims
The opinion noted the case involved complex retirement plan structures and investment products, including stable value investment arrangements commonly used in large employer-sponsored retirement plans.
An amicus brief filed by the Stable Value Investment Association provided additional context regarding the financial products discussed in the litigation.
Federal courts nationwide have seen a growing wave of ERISA lawsuits targeting large corporate retirement plans over investment fees, recordkeeping expenses, and fiduciary oversight practices.
Many of those lawsuits argue employers failed to leverage the bargaining power of large plans to reduce participant costs or improve investment performance.
In this case, however, the court determined the plaintiff’s allegations did not sufficiently demonstrate that Equitable’s plan fiduciaries acted outside the bounds of reasonable judgment under ERISA.
Dismissal Leaves Door Open for Revised Filing
Because the dismissal was issued without prejudice, Tedford may attempt to amend and refile the complaint with additional factual allegations.
The ruling does not represent a final determination on the merits of the claims but instead concludes the current complaint failed to meet federal pleading standards.
Neither Equitable nor attorneys for the plaintiff immediately commented publicly on the decision.
The case is titled Tedford v. Equitable Financial Life Insurance Company et al., Civil Action No. 25-cv-2180, in the United States District Court for the District of New Jersey.
Current Status
The federal court dismissed all claims in the amended complaint without prejudice on May 19, leaving the plaintiff the option to submit a revised complaint in the ongoing ERISA dispute involving Equitable’s retirement plan management.
