Here’s what can happen when workers suspect their 401(k) fees are too high:
Walmart Stores and Merrill Lynch (the company’s retirement plan provider) just settled a class-action lawsuit for a whopping $13.5 million.
The employees filed suit in 2008 because they thought Walmart could and should have negotiated lower fees. A Missouri employee complained the company only offered 10 investment options that all carried “retail” – AKA higher than average – fees.
Although the company admitted no wrongdoing, the majority of the settlement will go towards reducing future retirement plan fees.
Merrill Lynch wasn’t initially named in the suit. But during the trial, the firm was charged with receiving “kickback payments” from mutual fund companies in exchange for allowing those firms into the plan.
Cite: Braden v. Walmart Stores, Inc., U.S. Court of Appeals, 8th Circuit, No. 08-3798, 11/25/09.