JP Morgan office in Manhattan, New York. Photo: Ryland West/ALM
After getting sued on March 14 by a former employee who says 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, JP Morgan Chase is now disputing allegations of mismanagement in the employees’ retirement plan, stating that this allegation rests on a “false premise,” in a motion filed last week.
This new lawsuit was filed one day after JPMorgan was hit with an ERISA lawsuit over its employee health plan. Current and former employees are suing JPMorgan, alleging that it 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 PBM contract resulted in unnecessarily high prescription drug costs.
Recommended For You
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.
The JPMorgan Stable Value Fund (SVF) provided significantly lower rates of return than similar options available from other companies while exposing workers to greater financial risk, according to the suit. In addition, this fund improperly benefited the insurance companies that offered the fund’s underlying investments, according to the suit.
By the end of 2023, $2,425,277,812 in plan assets were invested in the JPMorgan SVF, according to the proposed class action lawsuit. “With the massive amount of assets under management in the JPMorgan SVFs, the losses suffered by Plan participants were devastating,” according to the suit.
JPMorgan breached its fiduciary duty “by selecting and/or maintaining a certain stable-value investment with lower crediting rates when compared to available similar or identical investments with higher crediting rates,” alleges the suit.
The bank invested in synthetic guaranteed investment contracts offered by MetLife, Prudential, Transamerica, and Voya that “provided significantly lower rates of return than comparable stable value funds that defendants could have made available to Plan participants,” according to the suit.
Related: JPMorgan is latest employer to get sued over ‘wrongful use’ of 401(k) forfeited funds
In January, JPMorgan was hit with another class action lawsuit, alleging it used retirement plan contributions from departing employees to “offset its employer contributions” rather than reducing plan administrative fees, violating ERISA. JPMorgan saved itself “millions of dollars in contribution costs” by failing to act in the “best interest of the Plan’s participants,” according to that lawsuit.
© 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.
