A judge is letting a 401(k) fee lawsuit against Ameriprise Financial go forward. Ameriprise employees are suing the company for including its proprietary RiverSource mutual funds (now part of Ameriprise's Columbia Management [profile]) in the Ameriprise 401(k) plan, alleging that these funds charged higher fees and provided worse returns than other available funds.

Our sister publication 401kWire broke the news earlier this week. The Minneapolis Star Tribune also reported on it.

The Star Tribune says that US district judge Susan Richard Nelson upheld seven of the nine counts against Ameriprise and partially updheld one more. The counts included "failure to monitor fiduciaries, prohibited transactions and excessive record-keeping fees."

According to a note by Judge Nelson, "Of any company, Ameriprise should know what is a good financial product. This is a case of frank self-dealing."

The plaintiffs' lawsuit claims that the 401(k) lost $20 million because of poor fund performance and excessive charges. The complaint, which was filed this past February, compares the RiverSource funds' fees and returns unfavorably to those offered by Vanguard funds.

The plaintiffs' attorney in this case, Jerry Schlichter of Schlichter Bogard & Denton, has successfully brought similar cases against 401(k) plans and their providers. This past year, he won a total of $50 million from the Swiss tech company ABB, Inc. and its recordkeeper, Fidelity, on behalf of ABB's 401(k) plan participants in the first defined-contribution fee case ever to go to trial in the United States..  

Edited by: HFD


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE