Employee David K. Parsons alleged that Anheuser-Busch was obliged under the Employee Retirement Income Security Act (ERISA) to pick a less risky QDIA in November 2008 to house funds in participants’ accounts generated when InBev acquired Anheuser-Busch by paying shareholders $70 a share. Shareholders included participants who had built up blocks of stock through their pension plan.
According to Parsons’ complaint, which seeks class action status, Anheuser-Busch circulated a flyer to its employees just after the sale was completed telling them they would have until November 7 to choose an investment fund for the cash from their stock sale and that if they did not, the money would go to an “Indexed Balanced Fund.”
Parsons argued that reasonable notice of the QDIA was not given, there was a limited election window to direct a transfer to another investment fund, and there was no description of the Indexed Balanced Fund in the flyer mailed out by Anheuser-Busch.
He charged in the suit that, despite the flyer’s representations, the plan mandated that the QDIA for employees not choosing an investment choice for their cash assets would be a “Short-Term Fixed Income Fund.”
The plaintiff did not submit a choice and trustee BNY Mellon Bank transferred $271,024 of Parsons’s cash to the Indexed Balanced Fund. The money transferred to the Indexed Balanced Fund remained in the fund for just under two days, when Parsons took steps to move it to the Short-Term Fixed Income Fund. In those two days, Parsons allegedly lost $20,000 due to the market volatility of late 2008.
According to the suit, Parsons wrote Anheuser-Busch, requesting that he be reimbursed for his investment loss. Parsons argued in the letter that his cash assets from the InBev sale were transferred by BNY Mellon to the Indexed Balanced Fund without his permission. The company responded by saying the Indexed Balanced Fund was selected as the plan’s default because it was a diverse fund and satisfied the QDIA requirements.
The complaint is available here.