JPMorgan Fights back Against New 401(k) Lawsuit Alleging ‘Devastating’ Participant Losses

JP Morgan office in Manhattan, New York. Photo: Ryland West/ALM

A former employee filed a lawsuit against JP Morgan Chase on March 14, alleging that an in-house stable-value investment fund in the bank’s $44 billion 401(k) plan performed poorly when compared with other available similar funds. In response, the bank filed a motion last week disputing the charge of mismanagement in the employee retirement plan, stating that the allegation rests on a “false premise.” This new lawsuit was filed one day after JPMorgan was hit with an ERISA (Employee Retirement Income Security Act) lawsuit over its employee health plan. In that suit, current and former employees allege that JPMorgan allows inflated drug prices through its partnership with its pharmacy benefit manager, CVS Caremark. Employees claim that the bank’s failure to properly oversee its pharmacy benefit manager contract resulted in unnecessarily high prescription drug costs for participants.

In the 401(k) lawsuit, Gonzalez v. JPMorgan Chase Bank N.A. et al., filed in U.S. District Court for the District of New Jersey, former employee Alexandro Gonzalez claimed that JPMorgan failed to objectively and adequately review the plan’s investment offerings to ensure each investment option was prudent in terms of performance. However, JPMorgan “did exactly what the plan terms require,” according to a company statement.