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Allianz Retirement Plan Case

Two participants in an Allianz retirement plan have claimed that the company and its asset management partners misused employees’ 401(k) plan assets for their own financial benefit. Several entities are named in the complaint, Allianz Asset Management of America (including AAM-LP and AAM-LLC) and the Allianz Asset Management of America, L.P. 401(k) Savings and Retirement Plan Committee, inclusive of the COO and Managing Director of AAM, who allegedly mismanaged plan assets for their own benefit and their affiliates’ benefits. Participating employers were also named as “improperly receiving plan assets as profits at the expense of the Plan and its participants.”

Among the many allegations include the defendants using the Plan as an opportunity to promote the Allianz family mutual fund business (allegedly maximizing profits at the expense of the Plan and participants). The Plan offerings consist of Allianz mutual funds, with plan expenses 75% higher than the average retirement plan of the same asset size (as cited according to 2013 information), attributable to the high-cost proprietary funds in the Plan. Such circumstances are allegedly not the result of negligence but intentions of the defendants, as the Allianz family would benefit. Allegations also include improper use of the plan to promote “new and untested” proprietary mutual funds to help seed and generate profits for the company more quickly.

The plaintiffs are seeking recovery of financial losses due to such breaches of fiduciary duties and self-dealing, as well as injunctions and “other equitable relief from the defendants, as provided by ERISA.”

www.planadviser.com; October 12, 2015.