Centerra, Aon Hewitt Cannot Evade ERISA 401(k) Lawsuit Brought by Schlichter Bogard

As previously reported, Schlichter Bogard & Denton filed suit in December 2020 against Centerra Group, LLC (“Centerra”) — a subsidiary of Constellis — and Aon Hewitt Investment Consulting, Inc. (“Aon”) on behalf of participants in the $350 million Centerra 401(k) plan, now called the Constellis 401(k) Plan. The lawsuit alleges, among other things, that defendants breached their fiduciary duties under ERISA by replacing established investment funds with untested, proprietary Aon collective investment trusts that paid fees to the plan’s investment manager and resulted in substantial performance losses for plan participants. Also at issue is Centerra’s alleged failure to monitor administrative costs, causing plaintiffs to pay excessive recordkeeping fees.

As reported by Law360, the U.S. District Court for the District of South Carolina on September 16 allowed the case to move forward, concluding that plan participants had laid out a case that defendants “breached fiduciary duties to invest carefully and with the pension benefit plan participants’ best interests at heart.”

More specifically, the Court held that the complaint successfully alleged not only a “flawed outcome,” but also a “flawed process.” With regard to Aon, the Court found that the complaint properly asserted breaches of the duties of prudence and loyalty. Regarding Centerra, the Court found that the complaint sufficiently pleaded breaches of duty of prudence.

We are proud to be pioneers in retirement plan litigation. Visit our website to learn more about other high-impact cases we’ve handled. For additional information about Schlichter Bogard & Denton’s Retirement practice, please contact us at 800-873-5297 or via email at contact@uselaws.com.