Wells Fargo Settles an ERISA Lawsuit For $32.5 Million
Parties in a lawsuit against Wells Fargo 401(k) plan fiduciaries have filed a motion for preliminary approval of a settlement.
According to a memo filed by the plaintiffs in support of the motion, under the terms of the proposed settlement, the defendants will pay a gross settlement amount of $32.5 million into a common fund for the benefit of the proposed settlement class. As the memo notes, “This is a significant monetary recovery for the class.” And, it says, the settlement “falls well within the range of court-approved settlements in similar [Employee Retirement Income Security Act] cases.”
The original lawsuit, filed in March 2020, claims that upon the creation of the Wells Fargo/State Street Target collective investment trusts, or Target Date CITs, in 2016, the committee defendants added the CITs to the plan even though the funds had no prior performance history or track record which could demonstrate that they were prudent. Despite the lack of a track record, the committee defendants “mapped” nearly $5 billion of participants’ retirement savings from the plan’s previous target-date option into the Target Date CITs.
