Case About Ameriprise 401(k) Fund Selection Moves Forward

December 17, 2012 ( – A case claiming Ameriprise Financial favored its own affiliate funds in its 401(k) investment lineup has moved forward.

By Rebecca Moore | December 17, 2012
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In denying Ameriprise’s motion to dismiss, Judge Susan Richard Nelson of the U.S. District Court for the District of Minnesota found the plaintiffs plausibly alleged Ameriprise selected affiliated funds, such as RiverSource mutual funds and nonmutual funds managed by Ameriprise Trust Company (ATC), to benefit themselves at the expense of participants.The plaintiffs pointed to prudent alternatives to Ameriprise-affiliated funds that the plan’s fiduciaries could have chosen as investment options.    

Nelson noted that although, Department of Labor (DOL) regulations permit Ameriprise to select affiliated investment options for the plan, it still has a fiduciary duty to act with an “eye single” towards the participants in the plan.

According to Nelson’s opinion, as in the Braden v. Wal-Mart case, the “gravamen” of the Ameriprise participants complaint is that the defendants “failed adequately to evaluate the investment options included in the Plan” and, as a result, chose affiliated investment options that charged excessive fees (see “8th Circuit Says Wal-Mart 401(k) Suit Requires Further Discussion”). The court in Braden clarified that Rule 8 does not require a plaintiff to plead “specific facts”, explaining precisely how the defendant’s conduct was unlawful, but rather may plead facts indirectly showing unlawful behavior to “give the defendant fair notice of what the claim is and the grounds upon which it rests.”