District Court Dismisses Stable Value Case Against Equitable

A New Jersey federal judge granted a motion on Tuesday to dismiss a lawsuit against Equitable Financial Life Insurance Co. in which an employee accused the insurer of imprudently investing assets from its 401(k) retirement plan in an underperforming stable value fund.

Hollis Tedford v. Equitable Financial Life Co. et al. was dismissed without prejudice, as U.S. District Judge Jamel Semper, presiding in U.S. District Court for the District of New Jersey, wrote that the plaintiff did not present a plausible argument or adequate benchmarks to show that the Equitable Fixed Income Fund had underperformed.

Semper wrote, “Hindsight is an insufficient foundation to show imprudence,” but his ruling allows the plaintiff to refile the case with different arguments.

Tedford alleged three violations under the Employee Retirement Income Security Act, including that Equitable breached its fiduciary duty of prudence by investing in guaranteed investment contracts with lower credit ratings “when compared to similar or identical investments.”

Equitable was also accused of breaching its duty to monitor its investments and of making two prohibited transactions by paying “millions” in excessive recordkeeping fees to its recordkeeper, Alight Financial Solutions LLC. Alight was not a defendant.

The complaint was filed on March 31, 2025 and Equitable’s motion to dismiss was filed on October 22, 2025. The plaintiff was represented by Capozzi Adler P.C., and the defendants were represented by Proskauer Rose LLP.

The Equitable 401(k) Plan had 12,994 participants and $2.6 billion in assets as of December 31, 2024, according to its Form 5500.

Last year, 27 class action lawsuits were filed last year challenging the inclusion of stable value funds on plan investment menus, according to analysis by Encore Fiduciary.