August 10, 2020

Volume X, Number 223

August 07, 2020

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Ameriprise Agrees to Pay $27.5 Million to Settle Fiduciary Breach and Prohibited Transaction Claims

Defendants Ameriprise Financial, Inc., the fiduciary committees of the Ameriprise 401(k) plan, and individual committee members agreed to settle a lawsuit brought by a class of participants in the Ameriprise 401(k) plan for $27.5 million. In the lawsuit, plaintiffs alleged: (i) fiduciary breaches associated with (a) using an affiliate as a recordkeeper and failing to ensure recordkeeping fees and expenses were reasonable and (b) including proprietary and high cost investments in the 401(k) plan; and (ii) prohibited transactions associated with Ameriprise’s receipt of compensation from the 401(k) plan as a result of these fiduciary breaches.

In addition to the payment of $27.5 million, the settlement agreement calls for a three-year settlement period during which defendants will conduct a competitive RFP bidding process for recordkeeping and investment consulting services. Among other things, defendants also agreed that during the settlement period they will refrain from receiving compensation for administrative services provided to the 401(k) plan other than reimbursement of direct expenses as permitted by ERISA.  Defendants also agreed to pay fees to the plan recordkeeper on a flat fee or fee per participant basis only.

The case is Krueger v. Ameriprise Financial, Inc., D. Minn. Case No. 11-cv-02781

© 2020 Proskauer Rose LLP. National Law Review, Volume V, Number 97


About this Author

Joseph Clark, Labor Attorney, Proskauer Rose Law FIrm

Joseph E. Clark is an associate in the Labor & Employment Law Department and a member of the Employee Benefits & Executive Compensation Group where he focuses on complex employee benefits litigation.

Joe represents a diverse range of clients including financial service providers, Fortune 500 corporations, plan fiduciaries, and multiemployer funds in matters including government investigations, breach of fiduciary duty claims, cash balance plan conversions, denials of claims for benefits, and withdrawal liability and delinquent...