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Current and former New York Life workers asked a New York federal court Wednesday to approve nearly $6.3 million in attorney fees in a $19 million proposed class action deal to end a suit accusing the insurance giant of unlawfully retaining shoddy proprietary investment options in their retirement plans.

NY Life Atty $19M Cut : Attorney Fees Justification

The plan participants told the court the figure represents 33% of the settlement fund and is in line with other attorney fees awards that courts have approved. The deal, which received preliminary approval in March, resolves the plan participants' Employee Retirement Income Security Act (ERISA) lawsuit against the company.

The participants argued that the request is reasonable given the amount of work their counsel has put into the case without any payment. "Counsel from Cohen Milstein Sellers & Toll PLLC are seasoned class action practitioners who have successfully litigated numerous ERISA class actions involving similar claims," the filing said. "In recognition of its work, Cohen Milstein's employee benefits/ERISA group was named Practice Group of the Year in 2022 by Law360, and three out of four years combined."

Service Awards for Named Plaintiffs

The filing also requests $10,000 service awards for each of the 10 named plaintiffs. The plan participants said these amounts are also consistent with similar awards courts have approved.

NY Life Atty $19M Cut : Background of the Lawsuit

Former New York Life employee Stuart Krohnengold initiated the lawsuit in March 2021, accusing the company of breaching its fiduciary duty to two 401(k) plans by including its proprietary MainStay funds in the plans despite warnings from outside consultants that the investment options failed to reach their benchmarks.

Additionally, New York Life participated in transactions prohibited by ERISA by establishing a fixed-dollar account as participants' default investment alternative if they didn't make a different selection, according to the suit.

NY Life Atty $19M Cut : Details of the Plans

The two plans had more than $5 billion in assets and 29,000 participants at the end of 2021, court records said. The plan participants sought class certification in June 2023, arguing that class treatment was the best way forward because all the plan participants were commonly harmed by New York Life's ERISA violations.

NY Life Atty $19M Cut : New York Life's Defense

New York Life shot back in August at the participants' bid for class certification and denied that its MainStay funds had consistently underperformed or received poor ratings from consultants. The company said most investment options actually performed better than peers and those that didn't were promptly removed. The insurance company also defended the fixed-dollar account as a "nearly risk-free, highly-performing" investment option that's appropriate as a default for certain people.

Settlement Agreement

The parties notified the court in January that they had reached an initial deal to resolve the lawsuit and fleshed out the details of the agreement in a February filing. Around that time, lead plaintiff Krohnengold died, and his wife replaced him as a class representative, according to court filings. In their February filing, the participants told the court that the $19 million deal totals 20% to 25% of the losses they claimed the plans suffered.

NY Life Atty $19M Cut : Comments and Representation

Counsel for the plan participants declined to comment. Representatives of New York Life did not immediately respond to requests for comment Wednesday.

The proposed class is represented by Caroline E. Bressman, Eleanor E. Frisch, Jacob Schutz, Michelle C. Yau, Michael B. Eisenkraft, and Kai H. Richter of Cohen Milstein Sellers & Toll PLLC.

New York Life Insurance Co. is represented by Benjamin Reilly, David Rosenberg, Demario M. Carswell, James O. Fleckner, and William J. Harrington of Goodwin Procter LLP.