An Employee Retirement Income Security Act (ERISA) lawsuit against M&T Bank was just preliminarily approved this week by federal judge in New York. The lawsuit alleged the bank purposefully filled its employees’ 401(k) plans with the bank’s own more expensive investment options. The $20.85 million settlement will likely affect tens of thousands of people who participated in or were beneficiaries of these investment plans offered by M&T Bank between May 11, 2010 and September 30, 2019.
The lawsuit alleged that employees of M&T Bank participating in the company’s 401(k) plans did not have their investment lineup properly inspected to ensure all investments were cost-efficient. More specifically, the lawsuit claimed that the bank kept their proprietary funds in the investment lineup over other lower cost and better-performing options that were available. Employees also alleged that the bank failed to keep the investment plan’s record-keeping expenses low. In addition to the nearly $21 million amount outlined in the settlement, the deal also requires an independent consultant review all M&T-affiliated funds in their 401(k) plans going forward. A fairness hearing to decide the final approval of the settlement has been scheduled for September 3, 2020.
Unfortunately it is not uncommon for financial institutions to push proprietary funds into their employees 401(k) plans and avoid switching them out for cheaper better-performing options. As a hard-working employee, you deserve to have the company managing your future retirement plan put your interests first. If you believe this may be happening to you, please do not hesitate to call Fitapelli & Schaffer, LLP for a free phone consultation. We will gladly help you find out if you may have an ERISA claim. You can reach us at (212) 300-0375 or visit our website for additional information.