Participants in Ameriprise’s 401(k) plan are suing the investment firm, claiming it operated the retirement program for its own benefit, not its employees and retirees. Among the charges: That it illegally offered its own mutual funds as 401(k) investments, failed to operate the funds in the employees’ interest and charged fees that were too high.
The company, based in Minneapolis, has denied any wrongdoing and disputes the notion that the retirement funds were not run to benefit investors. Ameriprise claims it charged appropriate fees to plan participants.
The company also argues that an exemption in the Employee Retirement Income Security Act permits employers to offer their own products as investment options.
While that may be, observers note that the damage done to the company image may not be worth the fees it collects from its employees. Since investment firms rely on their perceived integrity, they risk a great deal by managing their own 401(k)s and charging market fees.
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Will proposed legislation put us on the financial hook for misclassified employees?
- What are the basic changes resulting from the ADA Amendments Act of 2008?
- Don't ask workers to waive past or future FMLA claims
- Play ball! But prevent legal risks at company activities