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Ameriprise Financial Case

In this case filed in 2011 in Federal Court, Ameriprise 401(k) plan participants alleged that Ameriprise’s 401(k) Plan invested “hundreds of millions of dollars” in mutual funds managed by RiverSource Service Corporation and Columbia Management Investment Services, both Ameriprise subsidiaries, generating millions of dollars in fees for those entities, thus providing a financial benefit to Ameriprise. The plaintiffs also alleged that the Plan’s fiduciaries selected Ameriprise Trust Company (sold to Wachovia in 2006), Ameriprise’s recordkeeper subsidiary, as trustee to the plan, absent a competitive bidding process, again, providing financial benefit to Ameriprise. Ameriprise’s funds, offered within the Plan, were alleged to be much more expensive than comparable mutual funds, and posted substandard

Ameriprise has agreed to settle the suit for $27.5 million. As part of the settlement, Ameriprise will re-bid its plan to recordkeepers and investment consultants. Recordkeeping fees will be set on a per participant fee basis or a flat fee basis, and lower cost investment vehicles such as collective investment trusts or separately managed accounts are to be considered. Additionally, the Plan’s fiduciary committee can no longer include executives from Ameriprise’s investment management subsidiaries., March 26, 2015.