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American Airlines (AA) Stable Value Fund Case

Plaintiffs in this case have filed a motion for class action certification. The claim concerns the lack of a stable value fund offering as the Plan’s “income producing, low risk, liquid fund.” In lieu of such an option, the Plan offers the AA Credit Union Fund, which has consistently failed to outpace inflation, delivering returns comparable to a “poorly managed checking account,” representing a “categorically imprudent retirement investment under ERISA.” Plaintiffs also allege that stable value funds populating large 401(k) plans typically offer higher returns. If the case in the AA Plan, plaintiffs and similarly situated participants would not have lost “tens of millions of dollars of their retirement savings” and would not “continue to suffer additional losses” due to the retention of the AA Credit Union Fund.

www.planadviser.com; April 26, 2018.