Merrill Lynch Retirement Account Holders Get Settlement
Investors who held specific accounts from 2016 to 2020 may be eligible for a share of a $39 million class action settlement.
Updated on Oct. 30, 2026 in Retirement Planning
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Merrill Lynch has agreed to a $39 million settlement to resolve a class action lawsuit regarding interest rates paid on specific retirement accounts. Eligible individuals who held Merrill Edge Self-Directed Investing retirement accounts between December 15, 2016, and March 15, 2020, may qualify for a payment.
Why it matters
The lawsuit alleged that Merrill Lynch failed to pay competitive market interest rates on cash holdings within certain retirement accounts during the specified period. This settlement aims to compensate account holders for the difference between the interest they received and what they should have earned.
The $39 million settlement requires a minimum threshold of $10 in calculated interest differences for an individual to receive a payout. Payments are distributed on a pro rata basis based on the gap between the interest earned and an appropriate market rate.
The players
Merrill Lynch
A financial services firm providing brokerage and retirement investment products.
The details
The settlement addresses claims that Merrill Lynch provided near-zero interest on cash balances within Merrill Edge Self-Directed Investing retirement accounts. Payments are determined by calculating the discrepancy between the interest actually paid and a benchmark market rate. Eligible account holders will receive automatic payments, though individuals must submit a request by March 26, 2027, to receive their funds electronically.
Timeline
The eligible holding period for accounts ran from December 15, 2016, through March 15, 2020.
Preliminary approval for the settlement was granted in October 2026.
A final settlement hearing is scheduled for March 12, 2027.
The deadline to submit a request for electronic payment is March 26, 2027.
Money Landscape
This settlement highlights the growing focus on how brokerage firms manage cash sweep interest for retail investors in retirement accounts. It follows a period of increasing scrutiny regarding how interest-bearing cash is handled within standard self-directed investment portfolios.
If you held a Merrill Edge Self-Directed Investing retirement account between late 2016 and early 2020, check your records to determine if you are eligible for a payment. Ensure you submit an electronic payment request by March 26, 2027, if you prefer a digital transfer over standard disbursement.
The takeaway
This settlement serves as a reminder to periodically review the interest-bearing features of your brokerage accounts. Speak with a qualified tax or financial professional to understand how receiving a settlement payment may impact your specific retirement account tax status.
What happens next
The final settlement hearing is scheduled for March 12, 2027, which will be followed by the payment distribution process.
Further reading
Learn more about managing your assets in our Retirement Planning section.
More information
To submit your request, visit the Official settlement website payment request.
Source note: This article includes information reported by Oregon Live.
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