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Sears Lawsuit

A proposed ERISA class action lawsuit has been filed by a participant in the Sears Holdings Savings Plan alleging that Sears continued to offer company stock in the Plan although imprudent. More specifically, the lawsuit contends that the defendants’ ignored the excessive risk to participants due to the rise in the debt-equity ratio of Sears, and that further, the fiduciaries were obligated by law to disregard any directive which required Sears stock to be offered in the Plan when it became apparent that the company stock was not prudent. Freezing plan purchases into the stock fund at year end 2016 was too late according to the lawsuit; the defendants failed to act in accordance with ERISA, protecting the interests of the plan and its participants.

www.planadviser.com; July 20, 2017.