RP Legal LLC has filed a lawsuit in South Carolina on behalf of the Geib family against Pacific Life Insurance Company, members of the Dixon sales network, and related entities, alleging that retirement assets were repositioned out of a 401k structure and into an Indexed Universal Life policy built on commission-driven design and undisclosed structural risk.
Court filing: View the filed lawsuit (PDF)
The lawsuit is putting the life insurance industry on notice, alleging that families are being encouraged to move 401k retirement savings into Indexed Universal Life policies that carry hidden structural defects, including aggressive base allocations and loan-dependent funding strategies.
“This is a national problem,” said Robert G. Rikard, lead counsel for the Geib family. “We are seeing families move substantial portions, and in some cases their entire 401k portfolio, into Indexed Universal Life policies that were never designed to replace a qualified retirement plan. When those policies are built on aggressive base design and then layered with policy loans used to pay tax consequences, the structure becomes extremely fragile. If performance assumptions do not materialize, people are not just facing underperformance. They are facing the devastating possibility of losing significant portions of their life savings.”
Rikard added, “It is fundamentally dangerous to recommend dismantling a diversified retirement portfolio and replacing it with a single insurance contract dependent on caps, participation rates, and loan mechanics controlled by the insurer. Consumers deserve full disclosure before their retirement security is put at stake.”
The Industry Trend: Moving 401k Assets Into IUL Policies
Across the country, consumers report being advised to move retirement savings into Indexed Universal Life insurance with representations that the policy will:
- Outperform traditional retirement accounts
- Provide tax-free retirement income
- Avoid market losses
- Function as a conservative alternative to a 401k
Unlike a 401k, however, an IUL is a life insurance contract governed by internal policy mechanics, insurer discretion, and commission-based distribution.
When retirement assets are repositioned into an IUL, families assume risks that do not exist in qualified retirement plans.
The Geib Complaint: Base Design and 100 Percent Allocation Risk
A central allegation in the Geib lawsuit concerns the structural design of the policy.
According to the complaint, the IUL was funded using a 100 percent base allocation, sometimes referred to as a no-blend design.
Base allocations typically:
- Generate higher commissions tied to target premium
- Increase early policy cost drag
- Reduce flexibility
- Magnify volatility
- Heighten lapse risk over time
When used in a retirement context, these design choices can undermine long-term sustainability.
The lawsuit alleges that these structural risks were not properly disclosed and that the policy design prioritized commission over retirement stability.
Policy Loans Used to Pay Taxes: A Hidden Structural Risk
Another structural defect alleged in the Geib complaint involves the use of policy loans to cover tax liabilities.
In many IUL retirement strategies, policyholders are told that loans can be used to:
- Supplement retirement income
- Pay taxes
- Manage cash flow
However, policy loans are not free money. They accrue interest, reduce cash value, and can trigger compounding risk inside the policy.
If performance underperforms projections, loan balances can outpace policy growth. This creates the possibility of:
- Policy lapse
- Unexpected tax liability
- Loss of retirement income
- Collapse of the strategy
Using policy loans to pay taxes further compounds this risk because the loan is funding a non-productive obligation rather than generating income.
The Geib lawsuit highlights how these loan mechanics, when layered on top of a commission-driven base design, can create long-term instability in what was marketed as a retirement solution.
Internal Investigation and Nondisclosure
The complaint also alleges that Pacific Life internally knew in 2018 that the selling agents were under investigation and terminated them in 2019.
According to the lawsuit, policyholders were not informed of this development, even as premiums continued to be accepted.
For families who repositioned retirement assets into IUL policies, the failure to disclose material information about the selling agents may have prevented timely reevaluation of the strategy.
Chris Dixon, Black Harbor Wealth, and Retirement Framing
The Geib lawsuit echoes earlier retirement disputes involving Black Harbor Wealth and Chris Dixon, where income-oriented strategies were marketed to families with assurances of safety and reliability.
In prior litigation, more than 60 families alleged they were misled regarding retirement income projections and product structure by Black Harbor and its agents.
The common theme in both contexts is the framing of complex financial products as retirement solutions without full disclosure of embedded risk, compensation incentives, and structural vulnerabilities.
Why 401k Reposition Into IUL Strategies Create Systemic Risk
When retirement savings are moved into an IUL policy that is:
- Commission maximized
- 100 percent base funded
- Dependent on policy loans
- Reliant on insurer controlled crediting
the long-term sustainability of the strategy becomes highly sensitive to assumptions.
If caps are reduced, participation rates change, or loan interest compounds faster than projected, the entire structure can deteriorate.
What begins as a “safe retirement reposition” can evolve into a cascading risk structure.
A National Issue, Not an Isolated Dispute
The Geib lawsuit is one case. But the structural defects it identifies are present in many 401k reposition into IUL strategies marketed nationwide.
As more consumers review their policies, especially those funded with retirement assets, questions are emerging about:
- Base design suitability
- Loan-based income assumptions
- Undisclosed commission incentives
- Post-sale disclosure failures
If You Repositioned a 401k Into an IUL
If you were advised anywhere in the United States to move retirement savings into an Indexed Universal Life policy, particularly one issued by Pacific Life or connected to sales networks previously associated with Black Harbor Wealth or Chris Dixon, your transaction should be reviewed.
Many policyholders do not discover structural defects until years later, when loan balances grow faster than cash value or income projections fail.
Proven Experience Recovering for Retirement Misrepresentation
Investor Loss Center has recovered millions for victims of complex IUL product misrepresentation.
Learn more about our work:
- Rikard & Protopapas Featured for Their Work Recovering Millions for Investment Fraud Victims
- National Spotlight: Robert Rikard Leads Team That Recovers Millions in IUL Fraud and Ponzi Scheme Cases
Speak With an Indexed Universal Life Litigation Attorney
If you repositioned a 401k into an IUL and are concerned about base design, loan structure, or undisclosed conflicts, a confidential review can help determine whether misrepresentations occurred.
The use of Indexed Universal Life as a retirement replacement is one of the fastest growing areas of financial litigation in the country.
Court filing: View the filed lawsuit (PDF)