Search the News Archive

John Hancock, Not 401(k) Plan, Receives Fruit of Foreign Tax Credits in Pooled Investments

"Plaintiffs' theory of their action was that John Hancock breached its duty of loyalty by receiving the foreign tax credits and not passing them on to the plans in any way, resulting in a reduction in the value of the plans' assets.... Adopting the logic of the lower court, with a notable exception on standing, the Eleventh Circuit affirmed the lower court's holding that John Hancock was not acting as an ERISA fiduciary with regard to the conduct at issue." [Romano v. John Hancock Life Ins. Co. (USA), No. 22-12366 (11th Cir. Oct. 30, 2024)]

Class Certified in Lawsuit by 401(k) Plan Trustees Against John Hancock

"The plaintiffs allege John Hancock breached [ERISA] fiduciary duty of loyalty by receiving and retaining foreign tax credits (FTCs) for the international investment options, resulting in an alleged reduction in the value of the plan's assets. The plaintiffs also allege that John Hancock caused the plan to enter into an ERISA-prohibited transaction by not crediting it with the value of the FTCs." [Romano v. John Hancock Life Ins. Co., No. 19-21147 (S.D. Fla. Jan. 14, 2022)]

Self-Dealing ERISA Challenge Targets John Hancock

"The proposed class action suggests that John Hancock breached its fiduciary duties 'by applying an imprudent and inappropriate preference for John Hancock products within the plan, despite their poor performance, high costs and lack of traction among fiduciaries of similarly-sized plans.' In addition, the self-dealing lawsuit suggests the firm failed to monitor or control the plan's administrative expenses, allegedly costing the plan millions of dollars in excessive administrative fees over the course of the class period." [Baker v. John Hancock Life Ins. Co., No. 20-10397 (D. Mass. complaint filed Feb. 27, 2020)]

John Hancock Expands Further Into Retirement Planning with Purchase of New York Life Division

"New York Life handles pensions and retirement plans for labor unions and mid-size to large companies, such as the office supply chain Staples Inc. Until now, John Hancock has provided retirement planning services primarily to start-ups and smaller business. The acquisition will bring $135 billion in assets and 55,000 retirement plans under John Hancock's administration. As part of the purchase, John Hancock expects to offer positions to all 450 New York Life employees in Westwood who handle the retirement segment[.]"

Text of Solicitor General's Amicus Brief in Support of Plaintiffs Alleging Fiduciary Breach by John Hancock Life Insurance Company (PDF)

"The district court's decision ignores the important fact that John Hancock not only retained the right to substitute or delete the funds available to the Plans, but regularly monitored the Plans and could, and on occasion did, unilaterally substitute fund and share classes at its discretion. Likewise, the decision ignores plausible allegations that, despite this authority, John Hancock failed to exercise this authority to eliminate funds when it would have been prudent to do so." [Santomenno v. John Hancock Life Insurance Company, No. 13-3467 (3d Cir. filed Jan. 21, 2014; corrected brief filed May 28, 2014)]

Federal Judge Rules That John Hancock Life Insurance Co. Is Not Entitled to Indemnification and Contribution

Excerpt: John Hancock cannot demand that a pension plan trustee suing it in an excess fee case actually pay for any plan losses charged by the trustee as a result of a Hancock fiduciary breach, the court said. U.S. District Judge Nathaniel M. Groton of the U.S. District Court for the District of Massachusetts ruled that Hancock was not entitled to rely on the legal principle of indemnification and contribution in the suit filed against Hancock by 401(k) plan trustee John Charters.

John Hancock Pitches Fixed Annuity To Pay For LTC Health Insurance

Excerpt: Banking on the notion that you'll want to use Peter to pay Paul, John Hancock Life Insurance has introduced 'LTC EasyPay,' a long term care insurance payment plan that uses the income from a Hancock immediate fixed annuity to automatically pay premiums for Hancock long term care insurance.

John Hancock Settles ERISA Lawsuit for $14 Million

"The settlement also provides an agreement that John Hancock will hire a third-party investment consultant to provide ongoing monitoring and review of the investment options for at least five years from the settlement effective date, will develop an investment policy statement for the plan, and hire a consultant to assist with issuing a request for information for record-keeping services."

John Hancock Dodges ERISA Class Action

"The cases are holding with few exceptions that the functional fiduciary test under 3(21)(A)(i) must show that the fiduciary actually exercised their discretion. In decisions in favor of AUL and John Hancock, the plaintiffs were unable to show that. In decisions against Transamerica, MassMutual, and ING, the plaintiffs were able to either show the exercise of discretion or that it was a issue of fact for trial.... The open question from these cases is whether 3(21)(A)(iii) requires the actor to actually exercise their discretion or not, i.e. it's a fiduciary breach to be both malfeasant and nonfeasant."

401(k) Excessive Fees Lawsuit against John Hancock Will Proceed

"In Santomenno v. John Hancock Life Insurance Company [3d Cir. April 16, 2012], the [U.S. Court of Appeals for the Third Circuit] vacated the district court's grant of summary judgment in favor of John Hancock regarding the plaintiffs' ERISA claims and remanded the case back to the U.S. District Court for the District of New Jersey for further proceedings."