Former Wells Fargo Employees Filed 401(k) Lawsuit
A new class action lawsuit alleges over $1 billion in retirement plan losses for workers.
Updated on Oct. 6, 2026 in Retirement Planning
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Five former Wells Fargo employees have filed a proposed class action lawsuit in U.S. District Court. The complaint claims that retirement plan participants suffered losses exceeding $1 billion due to the performance of specific investment options.
Why it matters
The legal action highlights how the selection and management of investment funds within 401(k) plans can have a substantial impact on long-term retirement savings. It underscores the importance of monitoring fund performance against broader market benchmarks.
The lawsuit claims $1 billion in retirement plan losses, filed by a group of five former employees. The complaint challenges performance metrics of actively managed mutual funds and State Street target-date funds.
The players
Wells Fargo
A major financial services company that manages large-scale 401(k) retirement plans for employees.
State Street
An institutional investment firm known for managing target-date funds often utilized in employer-sponsored retirement plans.
The details
The lawsuit alleges that the retirement plan's performance was negatively impacted by its selection of specific actively managed mutual funds and State Street target-date funds. These investments reportedly underperformed compared to established benchmarks and similar market alternatives, leading to the alleged losses for plan participants.
Timeline
October 5, 2026: The complaint was filed in U.S. District Court.
Money Landscape
This case follows a long-standing pattern of fiduciary duty challenges regarding the selection of retirement plan investment options. It sits within a broader trend of increased scrutiny on plan sponsors regarding how fund performance affects employee savings.
This legal challenge serves as a reminder for all households to periodically review the expense ratios and historical performance of funds held in their 401(k) accounts. If you have concerns about your plan's investment options, consider consulting with a qualified financial professional.
The takeaway
Investment performance significantly dictates the growth of your long-term retirement savings. Review your current 401(k) fund selection annually against its stated benchmark to ensure the costs and returns remain competitive.
Further reading
For more on managing your retirement portfolio, see our Retirement Planning section.
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