Nationwide Mutual Insurance Co. is urging an Ohio federal court to give it a quick win in a group of retirees' class action alleging mismanagement of their employee 401(k) plan, arguing the undisputed facts show a guaranteed fund option was a good investment.

Nationwide said Monday in a brief supporting its bid for summary judgment that the retirees failed to show how any of the other products they claimed had high returns or lower fees were comparable to the guaranteed fund option subject to their allegations of mismanagement, or that any of those products were even available in the marketplace.

"Regardless, the Sixth Circuit has held that a plan fiduciary has no obligation to select a product with the highest return or the lowest fees," Nationwide said, citing the 2022 case Smith v. CommonSpirit Health. . "With an above-market return and a low contract margin, the guaranteed fund indisputably was a prudent investment that provided tremendous benefits to participants."

Nationwide further asserted that the retirees are wrong that the guaranteed fund is illegal and prohibited, arguing that the plaintiffs are asking the court to "fundamentally redesign" the fund's terms and offer "an imaginary product that has never existed in the actual marketplace — all to the detriment of and in conflict with the interests of the class members."

"ERISA was not intended to enrich plaintiffs and their counsel at the expense of the plan participants," Nationwide said.

U.S. District Judge Sarah D. Morrison granted class certification in the action led by former Nationwide employees Ryan Sweeney and Bryan Marshall in March 2024. They allege that Nationwide Mutual made illegal transfers from the pension plan — an investment option under Nationwide's larger savings plan called the Guaranteed Investment Fund — to Nationwide Life Insurance Co., which serviced the plan.

The class includes all participants and beneficiaries who participated in the larger Nationwide Savings Plan and were invested in the guaranteed fund anytime after March 26, 2014.

Nationwide lost a bid to dismiss the case in March 2022 when the court ruled that the retirees sufficiently alleged a fiduciary breach by asserting that Nationwide Mutual and its subsidiary made decisions that favored their financial interests over those of plan participants.

According to the complaint, money invested in the guaranteed fund is transferred into Nationwide Life's general account, and employees are guaranteed a rate of return. However, Nationwide Life reduces the amount credited to plan participants to compensate for expenses, and Nationwide Mutual determines how much to pay its subsidiary, the complaint says.

Representatives for the parties did not immediately respond to requests for comment on Wednesday.

The class is represented by Kai H. Richter, Michelle C. Yau and Daniel R. Sutter of Cohen Milstein Sellers & Toll PLLC and Eric H. Zagrans of Zagrans Law Firm LLC.

Nationwide is represented by Michael H. Carpenter and Jeffrey A. Lipps of Carpenter Lipps LLP and Dustin M. Koenig, Alexandra L. Schill, Evan Miller and Daniel Charles Loesing of Jones Day.

The case is Sweeney et al. v. Nationwide Mutual Insurance Co. et al., case number 2:20-cv-01569, in the U.S. District Court for the Southern District of Ohio.