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Here Are the Ways Employers May Be Shortchanging Your 401(k)

The devil may be in the plan’s details, and more class-action lawyers are looking for him.
Photographer: Daniel Acker/Bloomberg

American workers often fail to scrutinize the details of their 401(k) plans—they’re just happy to have one and trust their nest egg will grow. But more lawyers are saying that the guy with the horns and hooves appears if you look hard enough.

Class-action law firms are furiously investigating retirement savings plans offered by a wide range of corporations and nonprofits, including universities. A mounting number of lawsuits against plans allege excessive fees and a lack of attention to plan design: In other words, that sponsors are breaching their fiduciary duty.

That duty means your financial interest comes first. Complaints filed in courthouses across the country allege plan sponsors have tossed that rule aside and are, in some cases, profiting off the backs of employees. The defendants have either denied the claims and pledged to contest the lawsuits, or declined to comment on pending litigation.