Lowe’s Cos. settled a class-action lawsuit filed by a participant in its 401(k) plan for a $12.5 million settlement fund from which participant class members are entitled to distributions.
The class-action lawsuit alleged that Lowe’s, its administrative committee, and investment consultant AON breached their fiduciary duty by offering the AON Growth Fund. No settlement has been reached yet with co-defendant Aon.
Aon was accused of a conflict of interest in recommending this proprietary fund for the plan and improperly did so to further its financial interests instead of the interests of the plan’s participants.
Proprietary funds are a minefield for any large 401(k) plan.