Wells Fargo & Co. agreed to pay $32.5 million to settle an ERISA lawsuit filed against the company and 401(k) plan fiduciaries by participants who alleged the plan charged excessively high fees and retained poor-performing investments.
The settlement agreement, which requires court approval, was filed April 1 in a U.S. District Court in Minneapolis, by attorneys representing the plaintiffs. "This motion is not opposed by defendants," the document said.
The complaint, originally filed in March 2020, accused the company and plan fiduciaries of self-dealing by offering various Wells Fargo funds in the plan menu as well as charging high fees and keeping poor-performing investments.
Participants filed amended complaints in June 2021 and September 2021, in Becker et al. vs. Wells Fargo & Co. et al.
The parties subsequently reached a preliminary agreement after meetings with a mediator. The settlement of the class-action complaint covers the period starting March 13, 2014, and runs through the day the settlement becomes final.
"Continuing the litigation would have resulted in complex, costly, and lengthy proceedings before this court, and potentially the Eighth Circuit (Court of Appeals), which would have significantly delayed any relief to settlement class members and might have resulted in no relief at all," the document said.
Wells Fargo & Co. 401(k) Plan, San Francisco, had $48.8 billion in assets as of Dec. 31, 2020, according to the most recent Form 5500 filing.