The JPMorgan Chase & Co. headquarters on Park Avenue in New York City. Photo: Katherine Welles/Adobe Stock
JPMorgan Chase is the latest employer to face a class action lawsuit over misuse of 401(k) funds, alleging the company breached its fiduciary duty under the Employee Retirement Income Security Act by using retirement plan contributions forfeited by departing employees to “offset its employer contributions,” according to the class action complaint, Wright v. JPMorgan Chase & Co. et al.
Rather than using 401(k) forfeited funds to reduce plan administrative fees, JPMorgan mismanaged its employees’ retirement plan by using the funds “for its own benefit,” according to the complaint filed on Tuesday in the U.S. District Court for the Central District of California.
Recommended For You
The JPMorgan Chase 401(k) Savings Plan had more than $44 billion in assets and 292,458 participants, according to its 2023 Form 5500 filing. Employees are fully vested in the “employer contributions after three years,” according to the complaint.
Since 2023, more than 30 class action 401(k) lawsuits have been filed by plan participants over misuse of forfeited assets from former employees, according to law firm Holland & Knight. Earlier this month, Amazon was sued by participants, alleging the online retailer violated its ERISA fiduciary duties by using $350 million in forfeited funds to offset the company’s own contributions instead of reducing administrative fees for over 20,000 participants.
In 2024, Bank of America, Wells Fargo, Siemens and Nordstrom were hit with similar lawsuits.
Banking giant JPMorgan used 401(k) forfeitures to reduce the employer contributions it would otherwise have to make to the plan instead of using this money to benefit the plan and its participants, according to plaintiff Daniel Wright. JPMorgan saved itself “millions of dollars in contribution costs” by failing to act in the “best interest of the Plan’s participants,” according to the suit.
Starting in 2024, the IRS required that retirement plans use 401(k) plan forfeitures before the end of a vesting schedule and the funds can be used to pay plan expenses, reduce future employer contributions or to make an additional allocation to participants.
Related: Amazon sued by employees for mismanaging $350M in forfeited 401(k) funds
Plan sponsors also have a choice in how they handle balances left in the plan from uncashed checks – they can keep the balance in the plan until claimed, place the funds in a forfeiture account, or rollover the funds to an IRA. Plan sponsors can keep the funds in the accounts until claimed — as chosen by 45% of respondents — place funds in a forfeiture accounts (41% of plans), or roll that money over to an IRA (14% of respondents).
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
