Goldman Sachs Prevails In 401(K) Class Action By Its Employees
September 29, 2022
More than 30,000 Goldman Sachs’ employees joined a class action over the company’s use of high-cost, underperforming in-house mutual funds as investment options in their retirement plan. Collectively they invested about $7.5 billion in their 401(k)s between October 2013 and June 2017, when the last of the five challenged funds was removed from the plan. Their suit was one in a series challenging management of defined contribution plans under ERISA. On Sept. 14, U.S. District Judge Edgardo Ramos found against the plaintiffs. He ruled that there was no proof that Goldman’s retirement committee’s decision to use the funds created a conflict of interest, and called suggestions that the company would have removed the funds sooner if they weren’t Goldman’s speculative. “The mere possibility that committee members may have been influenced by a desire to benefit Goldman Sachs is not enough to show a breach of the duty of loyalty,” Ramos wrote.
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