Akey v. Big Y Foods Alleges ERISA Breach Over Underperforming Target-Date Funds
Plan Fiduciaries Retained American Century TDFs Despite Persistent Underperformance
A class action complaint filed in the U.S. District Court for the District of Massachusetts alleges that Big Y Foods, Inc. and unnamed fiduciaries breached their duties under the Employee Retirement Income Security Act by selecting and retaining underperforming American Century Target Date Funds as the qualified default investment alternative for the company’s $483 million to $573 million 401(k) plan. The complaint, filed June 24, 2026, alleges that the defendants violated their fiduciary duties by retaining the funds despite evidence of their inferior performance, resulting in losses to plan participants.
The plaintiffs—Ross Akey, Tracy Hess, and Jada Rogers, individually and on behalf of the Big Y Foods, Inc. 401(k) Retirement Savings Plan—allege that the defendants violated ERISA’s duty of prudence by retaining the American Century Target Date Funds. The funds comprised 65% to 69% of the plan’s assets from 2020 through 2024. "The selection of a TDF series as the QDIA by a plan fiduciary is often the most important and impactful of all its investment selection and monitoring responsibilities," the complaint states (Compl. ¶42).
“Defendants violated their fiduciary duties by both (1) initially selecting; and (2) consistently retaining the American Century Target Date Fund for more than eight years, even when it glaringly underperformed under all investment metrics,” the complaint alleges (Compl. ¶3).
Underperformance Metrics and Modern Portfolio Theory Analysis
The complaint relies on a series of benchmarks to support its claims, including Morningstar data and risk-adjusted performance metrics. The plaintiffs allege that the American Century Target Date Funds underperformed in 503 out of 534 data points, or 94%, of 3- and 5-year metrics compared to four industry-leading target-date funds during the 2018–2019 period (Compl. ¶93). The metrics used for evaluation include Alpha, Sharpe Ratio, Sortino Ratio, Information Ratio, Batting Average, and Turnover Ratio (Compl. ¶59–60). "Risk-adjusted performance is the primary and most important criteria," the complaint asserts (Compl. ¶57).
The plaintiffs further allege that the American Century Target Date Funds underperformed their comparators in 100% of these metrics from 2018 to 2019, leaving fiduciaries with no basis to expect improvement in 2020 (Compl. ¶94, ¶107–110). "Plaintiff did not cherry pick fringe or unproven peers for comparison," the complaint states (Compl. ¶102).
The complaint also highlights market signals that, in the plaintiffs' view, should have compelled the defendants to remove the funds. In 2024, the American Century Target Date Funds experienced net outflows of $4 billion, representing a 19% decline in assets under management (Compl. ¶46–47).
“A prudent fiduciary... could not have concluded that it was prudent to continue to retain the AC TDF series unless they employed a flawed process,” the complaint states (Compl. ¶95). The plaintiffs argue that the defendants’ failure to act on these signals demonstrates a breach of their duty to monitor investments continuously, as required under ERISA (Compl. ¶23).
Q1 2020 Drawdown and Glide-Path Construction Underscore Alleged Harm
The complaint emphasizes the American Century Target Date Funds’ performance during the COVID-driven market sell-off in the first quarter of 2020, when the funds lost 10.15% compared to a 7.59% loss for the BlackRock LifePath funds (Compl. ¶71). For comparison, the American Funds Target Date Funds lost 8.85%, Vanguard Target Date Funds lost 10.74%, the median "through" series lost 10.74%, and the median "to" series lost 7.60% during the same period (Compl. ¶75, ¶78). The American Century funds comprised 65% to 69% of the plan’s assets from 2020 through 2024 (Compl. ¶43).
The plaintiffs challenge the defendants’ reliance on superficial labels, such as whether the funds were structured as “to” or “through” retirement glide paths. The complaint alleges that these labels are irrelevant to the actual economic characteristics of the funds, which should be evaluated based on risk-adjusted performance, fees, and glide-path construction (Compl. ¶64, ¶84). “The actual economic characteristics are what matter to prudent fiduciaries, not superficial labels,” the complaint states (Compl. ¶84). The plaintiffs argue that the American Century funds’ equity allocation at retirement—45%—was materially similar to that of the American Funds target-date funds (46%) and T. Rowe Price (42.5%) (Compl. ¶74–75). The BlackRock LifePath funds had a 40% equity allocation at retirement, while the median "through" series had 52% and the median "to" series had 35% (Compl. ¶74, ¶75, ¶78).
“Arbitrary limitation to only consider ‘to’ or ‘through’ options, or only ‘active’ and not ‘passive’ is imprudent,” the complaint alleges (Compl. ¶64).
Failure to Monitor and Remove Imprudent Investments
The complaint alleges that the defendants had multiple opportunities to remove the American Century Target Date Funds but failed to act. The plaintiffs specifically allege that the American Century 2030 vintage underperformed the American Funds 2030 vintage in all metrics from 2018 to 2019, further underscoring the imprudence of retaining the funds (Compl. ¶123).
“Every subsequent month... that the Fiduciaries failed to remove this option was a result of imprudence,” the complaint alleges (Compl. ¶97). The plaintiffs further contend that the defendants’ eventual removal of the funds in 2025 does not cure their years of alleged imprudence, as ERISA’s duty to monitor is ongoing (Compl. ¶70).
The complaint also includes a second count alleging that Big Y Foods, Inc. failed to adequately monitor other fiduciaries responsible for the plan’s investments. According to the filing, the company had the authority to appoint and remove fiduciaries and a duty to ensure that the plan’s investments were prudently managed (Compl. ¶161). “The Company failed to monitor the process by which Plan TDFs were evaluated,” the complaint states (Compl. ¶163).
Count I: Breach of Fiduciary Duty of Prudence Under ERISA
The complaint asserts a cause of action for breach of fiduciary duty of prudence under ERISA (29 U.S.C. §§ 1104(a)(1)(B), 1109) against the defendants. The plaintiffs allege that the defendants selected and retained the underperforming American Century Target Date Funds, violating their duty to act with the care, skill, prudence, and diligence that a prudent person familiar with such matters would use (Compl. ¶152, ¶157). The complaint emphasizes that the defendants failed to engage in a prudent process for monitoring the funds and removing them despite their persistent underperformance (Compl. ¶154, ¶156).
Class Certification and Requested Relief
The plaintiffs seek to certify a class of all participants and beneficiaries of the Big Y Foods, Inc. 401(k) Retirement Savings Plan from June 24, 2020, through December 31, 2024, under Federal Rule of Civil Procedure 23. The complaint argues that class certification is appropriate because the defendants’ alleged conduct affected all plan participants uniformly, and individual adjudications would risk inconsistent standards for the plan (Compl. ¶137–141).
The plaintiffs request a range of equitable and monetary relief, including:
- Certification of the class under Fed. R. Civ. P. 23 and appointment of Plaintiffs as class representatives and Milberg, PLLC/Capozzi Adler, P.C. as class counsel;
- Making the plan whole for losses caused by the alleged fiduciary breaches (29 U.S.C. § 1109);
- Disgorgement of profits to the plan (29 U.S.C. § 1132(a)(3));
- Imposition of a constructive trust over profits derived from the defendants' alleged breaches;
- A monetary surcharge against the defendants to restore all plan losses;
- Restoration of profits the defendants made through the use of plan assets;
- Apportionment of recovered amounts among the plaintiffs and the class;
- Attorneys’ fees and costs (29 U.S.C. § 1132(g)(1));
- Pre- and post-judgment interest; and
- Any other equitable relief deemed just and proper under 29 U.S.C. § 1132(a).
The complaint also demands a jury trial. The plaintiffs allege that the plan suffered losses due to the defendants’ retention of the American Century Target Date Funds (Compl. ¶158).
The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.
David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.
From the Complaint Public Court Record
1 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS ROSS AKEY, TRACY HESS, JADA ROGERS, Individually and on behalf of the BIG Y FOODS, INC. 401(K) RETIREMENT SAVINGS PLAN, and on behalf of all the similarly situated participants and beneficiaries of the plan, Plaintiffs, v. BIG Y FOODS, INC.; John and Jane Does 1- 30 in their capacities as fiduciaries, Defendants. Case No. 3:26-cv-30098 CLASS ACTION COMPLAINT JURY TRIAL DEMANDED I. INTRODUCTION 1. Plaintiffs Ross Akey, Tracy Hess, and Jada Rogers (“Plaintiffs”), individually, and on behalf of all other similarly situated participants, their beneficiaries and estates, and on behalf of the Big Y Foods, Inc. 401(k) Retirement Savings Plan (“the Plan”), bring this action under 29 U.S.C. §§ 1132(a)(2) and (3) against Defendants Big Y Foods, Inc. (the “Company”), and John and Jane Does 1-30 in their capacities as fiduciaries (“Doe Defendants”) (collectively, the Company and the Doe Defendants will be referred to as “Defendants” or “Fiduciaries”), to remedy Defendants’ breaches of fiduciary duties and other violations of the Employee Retirement Income Security Act of 1974, as amended (ERISA), 29 U.S.C. § 1001, et seq. 2. Defined contribution plans that are qualified as tax-deferred vehicles have become the primary form of retirement savings in the United States and, as a result, America’s de facto retirement system. Unlike traditional defined benefit retirement plans, in which the employer typically promises a calculable benefit and assumes the risk with respect to high fees or
2 underperformance of pension plan assets used to fund defined benefits, defined contribution plans operate in a manner by which participants bear the risk of high fees and investment underperformance. 3. As fiduciaries to the Plan, at all times relevant to this Complaint Defendants were obligated to act (1) prudently and (2) for the exclusive benefit of participants and beneficiaries. Defendan
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