News / Maersk faces class action over losses from 'mishandled' pension plan

Staff who enrolled in the Maersk Savings Plan in the US could, collectively, have lost between $10m and $22m in retirement savings in the past six years, according to a lawsuit. 

Maersk has until November to respond to the remaining three employees who filed the lawsuit and are demanding a class action to represent the 6,000 staff in the plan. One employee has voluntarily withdrawn her claim. 

The case could have consequences for employers, and their pension investment obligation. 

The case focuses on the ‘John Hancock’ fixed annuity that allegedly credited about 2%–3.6% during the period, while comparable-risk products, such as a Prudential annuity at 6.8%, paid substantially more. Plaintiffs say this gap produced millions of dollars in lost growth each year (for example, some $3.3m in 2023 when $96m was invested). 

The pension holders are suing Maersk, its pension committee, Mercer Investments and John Hancock Trust Co for mishandling the savings plan, in particular the fixed annuity contract with John Hancock.

The claimants pointed out that John Hancock was trustee, record-keeper and investment manager, which could indicate a conflict of interest. They also claim Maersk failed to look for better deals and didn’t replace the poorly performing annuity. 

Maersk’s Savings Plan held between $573m and $917m in total assets, of which between $78m and $97m was invested in John Hancock in any given year.  

It is claimed that the company’s actions broke US pension law by not acting prudently; engaging in prohibited transactions by allowing John Hancock to profit from the plan; concealing information from employees; and failing to fix problems. 

“In a word, the other defendants enabled John Hancock, they enabled each other’s breaches of fiduciary duty, and they enabled prohibited transactions. There can scarcely be imagined a more blatant example of a conflict of interest, breach of fiduciary duties, and prohibited transaction in a retirement plan.  

“This is precisely what ERISA [US pension law] was enacted to prevent,” noted the claimants. 

“Maersk obfuscated and hid from plan participants about as much as it could about the Hancock FA and the prohibited transaction with John Hancock.” 

The staff have asked the court to demand Maersk and co-defendants repay the plan for the losses and return any unlawful profits, along with covering costs. They have also demanded changes to how the plan is managed. 

The proposed class lawsuit would include not just those with money in the John Hancock annuity, but all participants in the Maersk Inc Savings Plan since 2019.  

US pension law ERISA requires employers and their investment agents to run pension plans ‘prudently’.