Back in the day, the question of theft of plan assets, usually indicated theft by the plan sponsor or plan provider (hello, Matt Hutcheson). These days, with access to 401(k) retirement distributions so easy, cyber theft is the biggest concern when it comes to the theft of plan assets.
A new ERISA lawsuit has been filed in federal court in New York, against the Colgate-Palmolive employee relations committee, plan recordkeeper Alight Solutions, and custodian BNY Mellon for their parts in operating the company’s defined contribution retirement plan and the theft of a participant’s $750,000 account balance.
The plaintiff is a former global director for customer marketing at Colgate-Palmolive, who has alleged that thieves have ripped off her entire account balance. The lawsuit claims that the plan providers missed several red flags.
The red flag was that within the span of fewer than two months, a person claiming to be the participant changed the participant’s phone number, email address, mailing address, and bank account information, and then requested an immediate cash distribution of the participant’s entire $750,000 plan account
In August 2020, the plaintiff claims she attempted to access her 401(k) account online to review the balance but she was blocked and the website informed her that she was entering an incorrect username ID and password. She then contacted the Colgate-Palmolive Benefits Information Center to request access and information about her plan account, according to the lawsuit.
The participant claimed that she was informed that the entire balance of her plan account, totaling $751,430.53, had been distributed from the plan in a single taxable lump sum, even though at no point had she authorized or received any such distribution to an individual with an address and bank account in Las Vegas, Nevada in March 2020, while the participant lived overseas.