Edward Jones 401(k) Fee Class Action Lawsuit Settles for $3M

Plan participants secured a $3 million settlement in a Edward Jones 401(k) fee class action that would benefit around 45,000 current and former employees.

The class action settlement, lodged in 2016, alleged that the Edward Jones 401(k) fees were excessive and in violation of the Employee Retirement Income Security Act (ERISA).

The plaintiffs, 401(k) participants, said that Edward Jones also failed to provide competitive investment options.

Under the terms of the settlement, the finance company will pay $3.175 million to Class Members, including those who participated in Edward Jones 401(k) plans starting in 2010.

“The proposed settlement here is the result of lengthy, contentious and complex arms-­length negotiations between the parties,” said the plaintiffs’ motion for approval of the Edward Jones class action settlement. “Counsel on both sides are experienced and thoroughly familiar with the factual and legal issues presented. Class counsel is very experienced in class action litigation generally and, in particular, class litigation under ERISA.”

Class Members in the Edward Jones 401(k) fee class action settlement will reportedly include about 40,000 current and former plan participants who worked for the financial institution.

The plaintiffs say that the settlement agreement should cover more than 50 percent of any amount that could have been awarded had the Edward Jones class action lawsuit gone through litigation.

“Settling this lawsuit — one of numerous cases of this very type filed in recent years against large companies and universities that sponsor retirement plans — has no impact on the plan’s commitment to provide quality investment options for Edward Jones associates,” said Edward Jones in a statement released after the class action settlement was announced.

“The firm is insured against settlement costs of this sort, so there is no direct impact on firm assets. In addition, after legal fees and settlement expenses, the settlement amount funded by insurance flows back into the accounts of class members.”

According to the Edward Jones 401(k) fee class action lawsuit, employees who participated in the financial company’s retirement plan got the short end of the stick when it came to fees and investment choices. The plaintiffs said that the administrative fees charged for the plan were excessive.

Further, alleged the Edward Jones class action lawsuit, investment options offered to plan participants were not competitive and in line with investments that perform well in the market.

The Edward Jones 401(k) fee class action lawsuit alleged that the administration of the retirement plan violated ERISA standards.

ERISA, or the Employee Retirement Income Security Act, is a federal law that protects certain types of retirement and pension plans – requiring plan administrators to meet certain standards when it comes to fees, investment options, and recordkeeping.

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The plan participants are represented by Jeffrey R. Baron, Gregory Y. Porter and Mark G. Boyko of Bailey & Glasser LLP, Mark P. Kindall, Douglas P. Needham and Robert A. Izard of Izard Kindall & Raabe LLP and Mark K. Gyandoh of Kessler Topaz Meltzer & Check LLP.

The Edward Jones 401(k) Fee Class Action Lawsuit is Shultz et al. v. Edward D. Jones & Co. LP et al., Case No. 4:16-­cv-­01346, in the U.S. District Court for the Eastern District of Missouri.