More than three dozen lawsuits have been filed in recent years over investment decisions that have caused 401(k) values to plummet. The most recent was filed last week against Ameriprise Financial Inc., led by a group of employees who argue that the firm pushed workers into expensive and untested proprietary funds. The cost? More than $20 million, prosecuters say.
“They put people into their products, and they were not vetted and were excessively expensive,” Jerome Schlitter, who is representing the Ameriprise employees, told Reuters in an interview.
The Ameriprise case is currently awaiting class action status. Lawsuits like this one may become less frequent next year; by May 2012, employers will be required to disclose more information about 401(k) fees to their workers, under rules issued by the Labor Department.