Past Cases

T. Rowe Price 401(k) Litigation

Status Past Case

Practice area Employee Benefits / ERISA

Court U.S. District Court for the District of Maryland

Case number 1:17-cv-00427


A federal class action lawsuit concerning T. Rowe Price’s 401(k) Plan, known as the T. Rowe Price U.S. Retirement Program (the “401(k) Plan”), was filed February 14, 2017. It is brought on behalf of current and former T. Rowe Price employees who have, or had, a balance in their 401(k) Plan accounts (their retirement savings) since February 14, 2011. The lawsuit alleges that Plan fiduciaries violated their duties under the Employee Retirement Income Security Act (“ERISA”) and caused the participants in the 401(k) Plan to pay millions of dollars in illicit fees by offering in the 401(k) Plan only T. Rowe Price’s own in-house investment funds, failing to offer the lowest cost versions of those funds, and failing to consider any funds from other companies that offered lower fees or better performance.

The lawsuit alleges that T. Rowe Price earned excess profits at the expense of its employees, who paid millions of dollars of their retirement savings in the form of excess fees, and have lost tens of millions of dollars due to investment underperformance.

On July 6, 2022 the Court granted final approval of the $7 million settlement, attorneys fees and reimbursement of expenses.

The case name is Feinberg v. T. Rowe Price Group Inc. et al, Case No. 1:17-cv-00427, U.S. District Court, District of Maryland.

Summary of the Claims

The lawsuit specifically alleges that T. Rowe Price and its affiliates violated ERISA, the federal law governing employee benefit plans, by, among other things:

  • Imprudent and disloyal selection and monitoring of 401(k) Plan investments by giving preferential treatment to the in-house funds resulting in millions of dollars in fee income for the company at the expense of the retirement savings of 401(k) Plan participants;
  • Failing to offer the lowest cost version of certain in-house funds to 401(k) Plan participants (who are/were T. Rowe Price employees);
  • Failing to remove and prudently monitor the performance of 401(k) Plan Trustees, who were breaching their duties of loyalty and prudence by exclusively offering in-house funds in the 401(k) Plan, and failing to consider lower cost and better performing non-proprietary alternatives; and
  • Engaging in transactions prohibited by ERISA by causing the 401(k) Plan to participate in transactions that the company and its affiliates knew or should have known constituted sales or exchanges of property between the 401(k) Plan and parties in interest, furnishing of services between the Plan and a party in interest, transfer of Plan assets to a party in interest, and transactions between a Plan and its fiduciaries.

Class Action

On May 17, 2019, the Court certified a class of T. Rowe Price Plan Participants that includes all participants in the T. Rowe Price U.S. Retirement Program who had a balance in their plan account at any time from February 14, 2011 through the date of judgment [now defined as January 18, 2022]. Any individual Defendants, any members of the T. Rowe Price Board of Directors, the Management Committee, the Management Compensation Committee, and their beneficiaries and immediate families are excluded from the class.

Status of the Litigation

The original Plaintiff filed the Complaint in the United States District Court for the District of Maryland (Baltimore) on February 14, 2017. Defendants filed a motion to dismiss, contending, among other things, that Plaintiff lacked standing with respect to some of his claims.

On July 21, 2017, Plaintiff filed an Amended Complaint adding ten additional named Plaintiffs. Defendants moved to dismiss again but dropped their standing objections. One of Defendants’ principal arguments for dismissal was that their actions as fiduciaries with respect to offering T. Rowe Price’s own funds in the Plan were mandated by the governing Plan document. After the Defendants’ second motion to dismiss was fully briefed, oral argument was held before the Hon. Judge Garbis. Judge Garbis subsequently retired; Chief U.S. District Judge James K. Bredar was assigned to the case. Judge Bredar listened to the recording of the oral argument and denied Defendants’ motion to dismiss on August 20, 2018.

On May 17, 2019, Plaintiffs filed a Second Amended Complaint which modified the list of Defendants named in the case. Defendants answered the Second Amended Complaint on May 31, 2019, and the Parties continued to engage in discovery.

On February 10, 2021, the Court denied in large part the Parties’ motions for summary judgment. Plaintiffs subsequently filed a motion for reconsideration and a motion for certification for interlocutory appeal to the United States Court of Appeals for the Fourth Circuit. The District Court denied both motions on March 23, 2021.A trial date of September 13, 2021 was set by the Court. The trial was subsequently postponed in light of the Parties’ agreement on a settlement in principle on July 23, 2021. A full settlement agreement was finalized on December 16, 2021.

Plaintiffs filed a Motion for Preliminary Approval of Settlement on January 7, 2022, followed by an Amended Class Settlement Agreement on February 22, 2022 On February 23, 2022, the Court issued an Order Granting the Motion to Amend and Reaffirm Order Preliminarily Approving Settlement.

On April 9, 2022, Parties filed a Motion for Final Approval and a Motion for Award of Attorneys’ Fees, Reimbursement of Expenses, and Service Awards to Class Representatives. On July 6, 2022 the Court granted final approval of the $7 million settlement, attorneys fees and reimbursement of expenses.


On July 6, 2022 the Court granted final approval of the $7 million settlement, attorneys fees and reimbursement of expenses.

The Settlement will provide the following relief to the Class: (i) Defendants’ payment of seven million dollars ($7,000,000), the net amount of which is to be distributed to the Class, and (ii) the addition of a Brokerage Window feature to the Plan that will allow participants, for the first time, to invest in a wide range of non-T. Rowe Price investment funds. The Court has also found that the initiation of the Action served as the catalyst for Defendants’ payment of $6.6 million (the “Special Payment”) to many Class members in January 2019. ECF No. 239.