‘Excessive’ 401(k) fee lawsuit ends with $13.5 million settlement
Here’s an example of just how costly it can be when workers decide you’re not doing everything in your power to avoid paying excessive 401(k) fees.
Wal-Mart Stores and Merrill Lynch (the company’s retirement plan provider) just agreed to settle a class-action lawsuit for $13.5 million. The suit claimed the world’s largest private employer didn’t do enough to negotiate lower 401(k) fees.
The lawsuit dates back to 2008, when a Missouri Wal-Mart worker accused the company – known for using size to get the lowest possible prices from its suppliers – of failing to negotiate lower fees for the mutual funds in its 401(k) plan. According to the suit, Wal-Mart offered just 10 investment options, most of which carried “retail” – a.k.a, high – fees.
While the company admitted no wrongdoing, the majority of its settlement will go toward reducing future 401(k) fees.
Merrill Lynch wasn’t initially named in the suit. However, during the trial, the firm was charged with receiving kickbacks from mutual fund companies in exchange for allowing them to be in the plan.
- Share on
Free Training & Resources
Further Reading
The IRS has explained how to handle taxes if a retirement plan participant doesn’t cash a distribution check and another check is issued....
A new proposed rule from the Department of Labor’s Employee Benefits Security Administration outlines how 401(k) fiduciaries must assess ...
CFOs and benefits professionals can only do so much to influence employees to invest in a company 401(k) plan. So-called influencers are of...
On Aug. 7, 2025, President Trump signed an executive order expanding 401(k) plans’ ability to include alternative investments – such as...
Environmental, social and governance (ESG) ratings of companies was never as popular as many in the media made it out to be. And the more t...
Employee experience – including employee mental health – has become a higher priority for many organizations, according to rese...
