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Walgreens steered its workers’ retirement savings into funds that performed worse than 70 to 90 percent of similar funds for nearly a decade, a class action lawsuit claims.
Last Thursday, U.S. District Judge Charles R. Norgle Sr. gave the green light to a class action lawsuit from 15 participants in a 401(k) plan who claim Walgreens — the second-largest pharmacy store chain in the United States — failed in its oversight of funds offered in its retirement plan, costing workers $300 million.
The proposed Class is made up of approximately 240,000 people, most of which are current and former Walgreens employees.
The workers’ complaint was brought in August 2019, and covers participants in the Walgreens Profit-Sharing Retirement Plan and its beneficiaries who were invested in certain Northern Trust target-date funds offered in the plan since Jan. 1, 2014.
Walgreens added the funds in 2013, even though the funds already had a poor track record in the previous three years, the lawsuit alleges. Workers claim the funds performed up to 90 percent worse than similar retirement plans.
Despite the fund’s poor performance, the pharmacy chain added even more Northern Trust funds to its offering in 2017, and made them the default investment option, the class action contends.
In the most recent quarter, Northern Trust reported $1.41 trillion in assets under management, up 7 percent from the previous quarter and up 14 percent from the fourth quarter of 2019, Pensions and Investments reported.
In January, Northern Trust said it was laying off 2.5 percent of its staff force globally and would take a charge of $55 million during the quarter “in connection with a reduction in force.”
In Judge Norgle Sr.’s order granting the workers’ motion for Class certification, he wrote that all requirements for the Class certification were satisfied.
He said the size of the Class “far exceeds” the 40-person threshold numerosity requirement, and that plaintiffs had selected qualified counsel to represent them.
Are you a current or previous Walgreens employee who has participated in a company 401(k) fund? Share your experience in the comments below.
The Class is represented by Charles Field, Kevin Sharp, David Tracey, and Danielle Fuschetti of Sanford Heisler Sharp LLP.
The Walgreens 401(k) Class Action Lawsuit is Brown-Davis et al. v. Walgreen Co. et al., Case No. 1:19-cv-05392, in the U.S. District Court for the Northern District of Illinois.
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24 thoughts onWalgreens to Face $300M Class Action Over Poorly-Performing 401(k)
Add me
Add me
Add me to that list.
I worked there and invested for years, glad to see they finally did something. Please add me too.
Add me.
Add me.
Please add me as well. I’ve been with Walgreen’s 24 years . 401K since the turn of the century, nothing to show for it
Add me
I should be included in this class action against walgreens
Add me
Please add me. Lost about 30% value.
Walgreens couldn’t even manage a merger with BOOTS,.
Lost near $800m.
Oh ya, and cancelled all accrued vacation for all employees that year. (Had to start from scratch Jan, 01)
Removed all store level Middle managers. Step down with pay cut or leave with a token.
And VP that thought up the deal left with over $80mil. + stock.
Lost (20m?) money to Rite aid when they said FTC was taking too long for buy outs of Rite Aid sites, and Walgreens cancelled.
It was funny Rite aid said “Ok” where is our $20m. Lawyers said “What??”. Someone didn’t read the cancellation clause.
“Welcome to Walgreen’s!”
Just add it after every complaint, it helps?