VA Federal Judge Dismisses Booz Allen 401(k) Mismanagement Suit

In Tullgren v. Booz Allen Hamilton Inc. et al., case number 1:22-cv-00856, Judge Michael S. Nachmanoff of the U.S. District Court for the Eastern District of Virginia dismissed an employee’s 401(k) mismanagement suit against Booz Allen Hamilton, at least for now. The judge gave the employee leave to file an amended complaint within 14 days. 

Michael Tullgren had filed suit against the Virginia-based consulting firm in August 2022, alleging that Booz Allen violated ERISA by investing employees’ retirement savings into poorly performing investment funds. More specifically, Tullgren pointed to Booz Allen’s selection of BlackRock LifePath Index Funds, which comprise a group of ten target date funds (TDFs). These funds performed significantly worse than other funds, which led to millions of dollars in losses in retirement savings for workers. 

Tullgren alleged that Booz Allen violated its fiduciary duty under ERISA by failing to substitute better-performing funds for the BlackRock TDFs. Booz Allen pushed back, arguing that Tullgren failed to compare the TDFs to similar, better-performing funds through benchmarks or discuss the options’ differences in investment strategies, styles, and asset locations. When it selected the TDFs, Booz Allen claimed that no “red flags” existed that would have indicated that they were a poor investment. Judge Nachmanoff agreed with Booz Allen’s arguments, findings that Tullgren had failed to provide convincing evidence of a breach of fiduciary duty.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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