In Rozo v. Principal Life Insurance Company, Todd Jackson, Nina Wasow and co-counsel represent a proposed class of participants in and beneficiaries of employee benefit plans that have invested in the Principal Fixed Income Option since 2008. The lawsuit alleges that, by retaining complete discretion for setting the credited rate of interest to plans and keeping the difference between its investment earnings and the credited rate, Principal acts as a fiduciary of the plans. Principal allegedly breached its fiduciary duties and engaged in prohibited transactions by setting the credited rate artificially low and paying itself excessive compensation.
On September 21, 2015, the Southern District of Iowa denied Defendant’s Motion to Dismiss. The court refused to conclude that the rate of return was reasonable or that all investment risk was allocated to Principal given its discretionary ability to set the credited rate. Discovery in the case is ongoing.