BofA 401k Changes: Investments in a Lawsuit-Plagued Industry
The Bank of America Merrill Lynch institutional retirement platform will manage Bank of America Corporation‘s (NYSE: BAC) $19 billion 401k plan starting in early 2015. The plan is currently managed by Fidelity investments. A Fidelity spokeswoman told Reuters that the company would continue to oversee the transferred savings account defined contribution plan, and the defined benefit pension plan Bank of America offers.
The company with the most participants in a Bank of America 401k plan is Wal-Mart Stores Inc. (NYSE: WMT). In June, Reuters contacted three people familiar with the discussions who said that Wal-Mart was in discussions with Wells Fargo & Company (NYSE: WFC) about about having its retirement division manage Wal-Mart’s $15.6 billion 401k plan.
In December 2011, Wal-Mart and Merrill Lynch reached a settlement in Braden v Wal-Mart. As a result of the class action lawsuit, Wal-Mart and Merrill Lynch agreed to pay $13.5 million in fees, according to Forbes. The suit alleged that employees were charged high fees for their 401k plans, and that the investment providers had breached fiduciary duties to employees.