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Lowe’s employees who have a 401(k) plan with the home improvement retailer claim that the company chose a weak fund in which to invest, losing plan members money.
Plaintiff Benjamin Reetz says he had all of his retirement funds invested with Lowe’s, and was financially injured by Lowe’s decision to move more than $1 billion in assets from eight other investment funds into the Hewitt Growth Fund, taking advice from Aon Hewitt Investment Consulting Fund. He claims that had Lowe’s not made this move, plan participants would have made an additional $100 million.
Reetz claims that Lowe’s choice to move the money, and the subsequent financial loss to plan participants represents a violation of the Employee Retirement Income Security Act (ERISA). He seeks damages for himself and other similarly affected plan participants. He seeks to force Lowe’s and Hewitt to pay for the plan participants’ losses, force Hewitt to disgorge its profits from the transfer, and stop Lowe’s from investing in the Hewitt Growth Fund going forward.
The Lowe’s ERISA class action lawsuit alleges that Lowe’s acted on the advice of Aon Hewitt Investment Consulting, the owner of the Hewitt Growth Fund. Allegedly, Hewitt’s behavior was self-serving, as they encouraged the transfer to support the Hewitt Growth Fund, which they knew was performing poorly. Ritz claims that “in recommending the Hewitt Growth Fund for inclusion in the plan, Hewitt put its own business interests ahead of the interests of the plan participants and beneficiaries, in violation of ERISA.”
The plaintiff goes on to claim that Lowe’s was not sufficiently vigilant in considering the quality and reliability of the information it was receiving from Hewitt. He states that “given Hewitt’s conflict of interest in recommending this fund, Lowe’s should have closely scrutinized Hewitt’s recommendation and rejected the Hewitt Growth Fund for the plan as other fiduciaries did for their plans.”
The Lowe’s 401(k) investment class action lawsuit states that Lowe’s has received investment advice on its 401(k) plans since 2009. Lowe’s plan reportedly has about $5.2 billion in assets and 250,000 participants.
In support of his claim that Lowe’s and Hewitt knew or should have known that the Hewitt Growth Fund was performing badly and was a bad choice for Lowe’s plan participants, Reetz cites information about the plan’s performance in previous years, and points to other institutions’ lack of significant investment in the fund.
The Lowe’s class action lawsuit notes that the Hewitt Growth Fund was losing money – allegedly, it was returning negative 0.67 percent interest during the period between the fourth quarter of 2013 and the third quarter of 2015. In contrast, the eight funds from which the Lowe’s funds were moved were gaining a weighted average of 7.3 percent interest.
Additionally, the Lowe’s Hewitt Growth Fund class action lawsuit notes that other institutions in the investment industry had showed little confidence in the Hewitt Growth Fund. Allegedly, the $1 billion investment from Lowe’s was notably larger than investments from other participating retirement plans, showing that comparable institutions did not have much confidence in the fund, which had $2.61 million in total assets.
Reetz is represented by F. Hill Allen of Tharrington Smith LLP and Paul J. Lukas, Kai H. Richter, Carl F. Engstrom and Brandon T. McDonough of Nichols Kaster PLLP.
The Lowe’s 401(k) Investment Class Action Lawsuit is Reetz v. Lowe’s Companies Inc., et al., Case No. 5:18-cv-00075, in the U.S. District Court for the Western District of North Carolina.
UPDATE: On Aug. 3, 2018, plaintiffs in a Lowe’s 401(k) class action are fighting to keep their lawsuit afloat, arguing that they included adequately facts to support their claims that the home improvement store cost the plan large amounts of money in violation of ERISA.
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30 thoughts onLowe’s Class Action Lawsuit Filed over Weak Fund for 401(k) Participants
Would love info on this. I worked for Lowe’s as well.
I worked for them from 2001 to 2017
I just received my letter in the mail about how I want to receive mines. So if I dnt send it back in time saying I want the funds to rollover in another plan I will get a check. Just tryna make sure I’m reading and understanding it correctly.
Add me to the list
I was employed from 2012 to 2019 and paid into the 401k from the start. How do I join the class action suit?
I never put that!
My wife is leaving Lowes after 13 years. We will be rolling her 401 k in to an IRA.
What info does she need to know about this Lawsuit and how will it affect her?
Thank You
I just recently retired was with the company for 25 years may I have information what’s going on with the law suit please.
I’m a former employee of Lowes from 2014 to 2019. I believe I started participating in the 401K program sometime between 2014 and 2015. Am I eligible for this class action lawsuit? If so please send me information
I am in the process and have signed paper for Lowes to release my 401 k to roll into an IRA. Waiting on the money to be sent to the bank now. Will I be eligible to participate n this law suit? Will all former employee be eligible that were employed during that time? Please advise if I need to do anything