Overview

Most employees depend on their 401(k) plans to save enough money to retire with economic security. But when employers or plan administrators mismanage their plans, it can have a large impact on the amount that employees have in their 401(k) accounts. That’s where we step in. Our lawyers file class actions on behalf of employees when their 401(k) plans have been mismanaged. For example, we have successfully recovered hundreds of millions of dollars on behalf of 401(k) plans that were  improperly filled with under-performing or expensive funds.

What Is a 401(k) Plan?

A 401(k) plan is a retirement plan that allows employees to contribute part of their paychecks to individual accounts. It is a type of “defined contribution” plan—which means employees contribute a fixed amount of their wages to an account in order to fund their retirement. 401(k) contributions can be either “after-tax” or “pre-tax” Roth contributions, depending on what the plan allows. Employers may also contribute matching contributions or profit-sharing to their employees’ accounts.

What Are My Rights as a 401(k) Plan Participant?

Employees who contribute to 401(k) plan accounts have a variety of rights designed to help protect their retirement savings. These include the right to get clear information about what funds they are invested in, how much those funds cost, and how they are performing compared to their benchmarks. Employees also have a non-forfeitable right to their own contributions and to any vested employer contributions, and the right to ensure that the 401(k) plan is managed prudently, loyally, and consistent with the plan documents.

Companies typically appoint high-level executives to manage their 401(k) plans. But federal law does not allow the fiduciaries who manage 401(k) plans to do whatever they want with the plan assets they manage. They owe fiduciary duties to the employees who participate in the plan. That means 401(k) account holders may sue fiduciaries who are not managing a 401(k) plan solely in the best interests of employees/participants. Plan fiduciaries are prohibited from making investment decisions for the 401(k) plans they manage to benefit themselves or anyone other than the employees/participants.

These rights and more are spelled out in the Employee Retirement Income Security Act, a.k.a., “ERISA”—a federal law that provides important protections to plans and the workers who participate in them. Our attorneys work tirelessly to hold corporations accountable when they violate these rights or mismanage their employees’ 401(k) plans.

How Can 401(k) Plans Be Mismanaged?

There are many ways that employers and plan administrators can fail to properly manage their company’s 401(k) plan. Sometimes, a company chooses to benefit from self-dealing with its 401(k) plan—for example, by putting the company’s own funds or insurance products in the plan’s investment menu. Companies that do so may be placing their own interests above the interests of their employees. The people running the retirement plan may also fail to perform the due diligence necessary to find the best-performing or lowest-cost investments for their company’s plan.  Plan administrators may also allow recordkeepers or other service providers to charge employees excessive fees. We handle lawsuits to hold plan fiduciaries accountable for all of these forms of mismanagement, and more.

How Do I Exercise My Right to Bring a 401(k) Lawsuit?

ERISA, the federal law that protects many retirement plans, including 401(k) plans, allows individuals to bring lawsuits on behalf of their) plan to address breaches of fiduciary duty or violations of ERISA’s rules related to self-dealing. If you believe you have a claim for mismanagement of your 401(k) plan, you can contact our ERISA lawyers to explore your options.

Examples of Our 401(k) Cases

We have achieved large recoveries for 401(k) plan participants who alleged that their plans were being mismanaged. Below are a few examples of some of the settlements we have reached that helped employee recover their retirement savings:

• Becker v. Wells Fargo & Co., No. 0:20-cv-02016(D. Minn.) –  Employees alleged that the Wells Fargo & Company 401(k) Plan was being mismanaged and that the defendants violated federal law by selecting certain investment options affiliated with Wells Fargo for the plan. Cohen Milstein achieved a $32.5 million settlement prior to class certification and expert discovery.
• Krohnengold v. New York Life Insurance Co., No. 1:21-cv-01778 (S.D.N.Y.) – Employees alleged that the New York Life Insurance Company Employee Progress-Sharing Investment Plan and the New York Life Insurance Company Agents Progress-Sharing Investment Plan were being mismanaged and that defendants violated federal law by selecting certain New York Life affiliated investments for the plan. Cohen Milstein achieved a $19 million settlement for the benefit of the class.
• Fuller v. SunTrust Banks, Inc., No. 1:11-cv-00784 (N.D. Va.) – Employees alleged that defendants improperly furthered SunTrust Banks’ corporate interests, rather than the interests of the Plan’s participants, by favoring investment options that were affiliated with and enriched SunTrust. We achieved a $29 million settlement on behalf of the class.
• Baird v. BlackRock Institutional Trust Co., No. 4:17-cv-01892 (N.D. Cal.) – Employees alleged that BlackRock and other defendants violated federal law by giving preferential treatment to affiliated products and funds in the BlackRock Retirement Savings Plan. Our 401(k) lawyers achieved a $9.65 million settlement for the benefit of the class.