American Century Investments recently won a class-action lawsuit alleging that they profited from their company 401(k) plan at the expense of employees by loading the retirement plan with in-house mutual funds.<\/p>\n
The judge in the case stated the trial evidence didn\u2019t show American Century\u2019s decisions were motivated by the desire to place their interests over participants. The judge also reasoned that it is common for mutual funds companies to offer their own investment funds in their retirement plans and there is no duty to offer more than one investment company\u2019s funds.<\/p>\n
While many other companies like Waddell & Reed, Deutsche Bank, and Citigroup settled for millions, American Century stood their ground and won the case.<\/p>\n
It\u2019s clear that plaintiffs failed to show that having those American Century funds in the plan was an actual breach of fiduciary duty. Like I\u2019ve stated before, mutual funds companies that place their own funds in their 401(k) plan are easy targets for ERISA litigators, so I\u2019m actually happy that a Judge said that just having those mutual funds doesn\u2019t show that it was an immediate breach of duty. I think plaintiff\u2019s counsel need to show an actual breach because, from a business standpoint, it would be bad for appearances if American Century didn\u2019t place their own funds in their own 401(k) plan because competitors would use this to besmirch American Century. Not having your own proprietary mutual funds in your own 401(k) plan looks as bad as the restaurant workers that order takeout.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" American Century Investments recently won a class-action lawsuit alleging that they profited from their company 401(k) plan at the expense of employees by loading the retirement plan with in-house mutual funds. The judge in the case stated the trial evidence … Continue reading