Nov. 23 — Wells Fargo & Co. enriched itself at its employees’ expense by including costly, in-house target date funds in its 401(k) plan, a new class action complaint alleges ( Meiners v. Wells Fargo & Co. , D. Minn., No. 16-cv-03981, complaint filed 11/22/16 ).
In the past year, several proposed class actions have targeted financial companies that include in-house investment products in their 401(k) plans. The employees bringing these suits have seen success in many instances, with courts refusing to dismiss cases against BB&T Corp., Putnam Investments LLC, Allianz Asset Management of America and Deutsche Bank.
This lawsuit, filed Nov. 22 in a Minnesota federal court, accuses Wells Fargo of intentionally boosting the 401(k) assets invested in the company’s own target date funds by defaulting participant contributions into those funds through a “quick” and “easy” enrollment process. The Wells Fargo funds consistently underperformed comparable target date funds, despite carrying fees 2.5 times higher, the suit alleges.