401(k) Lawsuit Investigation
Last Updated on May 1, 2020
Investigation Complete
Attorneys working with ClassAction.org have finished their investigation into this matter.
Check back for any potential updates and take a look at our open investigations here. The information on this page is for reference only.
At A Glance
- This Alert Affects:
- If you work for Apple, Ford, Nestlé, Caterpillar, Liberty Mutual or Motorola, your retirement funds may be at risk. Learn more about how you can help protect your money.
- What's Going On?
- Attorneys working with ClassAction.org are investigating whether these employees are getting charged excessive fees in connection with their 401(k)s.
- Is There Any Proof of Wrongdoing?
- No – this is still an investigation. That being said, the attorneys are sufficiently suspicious about the way these 401(k)s are being handled and feel their suspicion warrants further investigation.
If you work for any of the following companies and have a 401(k) plan through your job, an attorney may be able to help you.
- Apple
- Caterpillar
- Nestlé
- Ford
- Liberty Mutual
- Motorola Solutions
- Motorola Mobility
Attorneys believe that employees of these companies may be getting charged excessive fees in connection with their 401(k) plans.
How Could I Have Been Charged Excessive Fees?
It’s suspected that this is happening when employees opt to receive outside investment advice through their plan or make use of a brokerage window. (A brokerage window allows plan participants to invest in mutual funds other than the ones included in the plan’s designated list.)
It is believed that, in some cases, plan participants are being charged fees that are higher than the law permits. As a result, they may be unknowingly losing money, which can have a significant effect on their 401(k)s over time.
Outside Investment Advice
It’s possible that you took an option that allows for an outside fiduciary to provide advice for your plan. Attorneys are looking for workers who specifically opted to “upgrade” their plans to retain the services of a company called Financial Engines.
You may or may not be aware whether your plan includes this option or even retains Financial Engines’ services. That’s why attorneys working with ClassAction.org want to speak to any employee of Apple, Nestlé, Ford, Caterpillar, Liberty Mutual or Motorola who has a 401(k) plan to go over their statements together.
What Could Be Wrong with Receiving Outside Investment Advice?
There’s nothing wrong with it in theory – and many plans offer this as an option. While the primary managers and fiduciaries of a company’s 401(k) plan (including recordkeepers and other service providers) may manage the plans’ investments, employees opting for extra advice could be getting it from yet another third party. This is where the potential problem arises.
It is believed that in passing off this advisory work to other people and entities, namely Financial Engines, the 401(k) fiduciaries are still collecting a fee for work that they’re not performing. In essence, they’re double-dipping and getting paid out of employees’ retirement funds for doing nothing – and this, under federal law, is illegal.
Brokerage Windows
You may have also elected to invest your retirement funds through a “brokerage window” provided by your 401(k) plan. A brokerage window allows you to invest in mutual funds that are not included among your plan’s designated investment alternatives.
What Could Be Wrong with Using a Brokerage Window?
It is believed these outside parties are electing to include higher cost shares, even when lower cost shares are generally available. As a result, plan participants are getting charged a higher fee than they should for investments made through brokerage windows.
How Would I Know That I’m Being Overcharged?
Unfortunately, most 401(k) plan participants won’t be able to tell whether the fees they’re getting charged are excessive. That’s why the attorneys working with ClassAction.org are offering employees a chance to go over their 401(k) statements together.
These attorneys have been handling lawsuits on behalf of 401(k) participants for years and can identify certain hallmarks of malfeasance. In fact, they recently filed lawsuits against major organizations on behalf of 401(k) plan participants who they suspected weren’t having their funds managed properly.
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