More Americans than ever are relying on 401(k) plans to save for retirement. As of June 2014, assets in 401(k) plans surpassed $4.4 trillion according to the Investment Company Institute. When 401(k) accounts are misused or mismanaged, a 401(k) lawsuit could be filed to help affected parties who are seeking compensation for loss of income due to the mishandling of their retirement accounts.
If you have suffered a financial loss due to the mismanagement of your 401(k) retirement account, contact the American Injury Group today to learn more about your options. We can evaluate your case at no charge and connect you with an affiliated 401(k) lawsuit attorney who can assist you throughout the legal process.
What Is 401(k) Mismanagement?
An employer’s neglect in seeking the best overall cost, finding appropriate investment options, or monitoring poor performers creates the conditions that may be termed 401(k) mismanagement and could result in a substandard retirement plan for employees. The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.
Employee claims can arise because their employer has breached its fiduciary duty owed to them under ERISA because employers:
- Offer relatively poor performing investment options.
- Offer investment products with high fees when cheaper ones were available.
- Do not use the size of the plan to negotiate lowers fees with third party vendors.
In 2015, the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the agency charged with enforcing 401(k) regulations, investigated more than 201,000 inquiries of 401(k) mismanagement or malfeasance, resulting in more than $402 million in restitution and penalties.
Ten Warning Signs That Your 401(k) Contributions Are Potentially Being Misused
According to the Department of Labor, there are 10 warning signs that may alert employees that their pension contributions are potentially being misused:
- Your 401(k) or individual account statement is consistently late or comes at irregular intervals.
- Your account balance does not appear to be accurate.
- Your employer failed to transmit your contribution to the plan on a timely basis.
- A significant drop in account balance that cannot be explained by normal market ups and downs.
- 401(k) or individual account statement shows your contribution from your paycheck was not made.
- Investments listed on your statement are not what you authorized.
- Former employees are having trouble getting their benefits paid on time or in the correct amounts.
- Unusual transactions, such as a loan to the employer, a corporate officer, or one of the plan trustees.
- Frequent and unexplained changes in investment managers or consultants.
- Your employer has recently experienced severe financial difficulty.
These are just some examples. 401(k) mismanagement could be attributed to a number of different factors.
Notable 401(k) Lawsuits
- Boeing Corporation agreed to pay $57 million to settle a long-running lawsuit accusing the company of allegedly mishandling its 401(k) plan to the detriment of its employees. Filed on behalf of 190,000 Boeing employees and retirees, the class-action lawsuit accused Boeing of failing to uphold its fiduciary duties to employees by allowing excessive 401(k) fees to go unchecked, choosing higher-cost retail mutual funds over cheaper options, and improperly making 401(k) plan decisions to benefit vendors receiving other Boeing business.
- Lockheed Martin Corporation agreed to pay $62 million to settle a lawsuit in which employees accused the defense contractor of mismanaging their 401(k) retirement plan. In a filing with the federal court in East St. Louis, Illinois, lawyers for the plaintiffs called the settlement the “largest ever” in a case alleging excessive fees in 401(k) litigation. More than 108,000 plan participants were represented in the lawsuit, which began in 2006. Plaintiffs contended that Lockheed concealed excessive fees that were imposed on plan participants, and which ultimately dampened investment returns.
- A class action lawsuit against AEGON USA the global financial services organization was accused of forcing employee retirement savings accounts into high-priced AEGON investments and retirement programs, and routinely charging “unnecessary and exorbitant” fees. The lawsuit claims the company has violated pension law by putting their profits ahead of the best interests on their employees and in doing so has allegedly taken millions of dollars in excessive fees.
Consumers Affected By 401(k) Mismanagement May Be Entitled to Compensation
Employees affected by 401(k) mismanagement may be entitled to receive compensation for financial losses that they have suffered, and the responsible party may be liable for financial losses resulting from their mishandling of retirement accounts. Affected parties should seek legal counsel from a 401(k) mismanagement attorney to get more information about their options.
The time you have to pursue a claim is limited. Contact us for more information.Get Help Now.
If you have suffered a financial loss due to the mismanagement of your 401(k) retirement account, contact Attorney Group today to learn more about your options. We offer free, no-obligation consultations, and if you decide to pursue a claim, we can connect you with an affiliated attorney who can file a 401(k) lawsuit on your behalf and help you seek the compensation to which you may be entitled. The time to pursue a claim is limited, so contact us today.
