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JP Morgan 401(k) Plan Excessive Fee Settlement

The parties in this class action lawsuit covering 300,000 participants in the $20 billion JP Morgan 401(k) Plan have reached an “agreement in principle to settle on a class-wide basis.” The case alleges that JP Morgan failed to use ‘“their expertise and the Plan’s bargaining power”’ to “secure lower fees” for the investment options in the Plan through potential use of collective trusts or separate accounts, instead relying on proprietary or affiliated investments. There is also reference to Office of the Comptroller of Currency (OCC) and Securities and Exchange Commission (SEC) inquiries into business practices in which JP Morgan “improperly funneled client assets into JP Morgan affiliated funds” in lieu of third-party investments to generate investment fees which in turn, led to the reduction of proprietary fund fees. Preliminary approval of the settlement and settlement terms are expected by May 22, 2020.

www.planadviser.com; April 9,2020.