March 28, 2024 Newswires

Madison company sues MassMutual over alleged $3 million loss in retirement fund

Lake Geneva Regional News (WI)

NeuGen, a Madison-based spinoff of WEA Trust, on Wednesday sued Massachusetts-based MassMutual, alleging nearly 300 former NeuGen employees lost $3 million when MassMutual terminated a retirement fund after NeuGen announced layoffs in 2022.In June 2022, NeuGen announced 110 layoffs, with 58 more layoffs coming later that year. NeuGen was started in 2018 by WEA Trust, the insurance company created by the Wisconsin Education Association Council to provide benefits for public school employees.

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WEA Trust, which transferred its employees to NeuGen, stopped providing health insurance in Wisconsin at the end of 2022. It still provides life, disability, vision and long-term care insurance.

In the fall of 2022, when NeuGen told MassMutual it was downsizing, MassMutual "abruptly" stopped NeuGen from participating in its investment fund, forcing 295 workers, retirees and family members out at a depressed market value, NeuGen said in a statement. The participants saw their 401(k) investments drop 18% in one day, losing nearly $3 million, NeuGen said.

Vaughn Vance, NeuGen CEO, said MassMutual ignored better options that would have preserved the value of the retirement accounts.

MassMutual didn't immediately respond to a request for comment about the lawsuit, filed in Suffolk County Superior Court in Massachusetts.