Current and former CVS employees who invested in a target date fund through the company's 401(k) plan.
What's a Target Date Fund?
A target date fund is a type of mutual fund that anticipates a retirement date and automatically resets its asset mix accordingly. For instance, a younger worker may choose a 2050 target date fund so he can retire in 2050, while a 2025 fund may be more appropriate for someone closer to retirement age.
What's Going On?
Allegations have surfaced that certain funds offered through CVS' 401(k) plan carry excessive and hidden investment management fees that are essentially coming out of the pockets of employees. Attorneys are now investigating whether CVS can be sued for allegedly violating its legal responsibilities to employees by knowingly including these funds in its 401(k) plan.
Which Funds Are Affected?
Principal Lifetime 2010, 2020, 2030, 2040 and 2050 Separate Accounts; Principal Lifetime Strategic Income Separate Account; and Principal Stable Value Fund Common/Collective Trusts.
Attorneys working with ClassAction.org are investigating whether a lawsuit can be filed against CVS over its 401(k) plan. The attorneys have reason to believe that some employees are getting charged excessive and hidden management fees by the investment company and that CVS should have known better than to select such funds as options in its 401(k) plan. Furthermore, they suspect that no identifiable management services were being performed in connection with the fees and that the funds were essentially “just giving money away” to the investment company.
What Plans Are Affected?
It is believed that excessive fees are being charged in connection with the following funds:
Principal Lifetime 2010, 2020, 2030, 2040 and 2050 Separate Accounts
Principal Lifetime Strategic Income Separate Account
Principal Stable Value Fund Common/Collective Trusts
How a Lawsuit Can Help
A lawsuit could help CVS employees get their money back for the allegedly excessive management fees. It could also help ensure that, in the future, CVS lives up to its fiduciary duty when selecting funds for its 401(k) plans.