Five former Dell employees are suing the tech giant, alleging it mismanaged its 401(k) retirement plan and cost workers hundreds of millions of dollars.
The complaint, filed on January 28 in a federal court in Texas, alleges that Dell and its retirement plan managers held employees’ money for several years in underperforming investment funds, even as better alternatives became available.
They argue that the plan’s fiduciaries failed to properly monitor and replace several in-house investment options, including Dell Pre-Mixed Portfolio Target Date Series and Dell Core Funds, that consistently underperformed comparable funds in the market.
The plaintiffs say those decisions violated the Employee Retirement Income Security Act (ERISA) and led to “massive underperformance” that “resulted in the loss of over $318 million of assets for the Plan and its participants.”
“The participants in the Plan suffered financial harm as a result of the Plan’s imprudent investment options and the process Defendants used to monitor and retain the Subject Funds,” the complaint states.
The “breadth and depth” of the fund’s “underperformance raises a plausible inference that Dell’s selection and monitoring process was tainted by a lack of competency and/or complete failure of effort,” the plaintiffs allege.
Dell’s 401(k) plan provides retirement savings for roughly 63,000 current and former employees and their beneficiaries, according to the court filings. In 2024, the plan held about $14.6 billion in assets, the documents state.
The lawsuit is led by five former employees — Allison Lowbruck, Adam Moss, Eric Rodgers, Michael Schwartz, and John Vedamanikam — who are seeking to recover alleged losses for plan participants and reclaim any fees they say were earned through self-dealing.
They are also calling for changes to how Dell’s retirement plan is run going forward and for the removal of those who “have breached their fiduciary duties.”
Lawsuits alleging 401(k) mismanagement are not unheard of.
Some similar suits brought by plan participants against large companies in the past have resulted in settlements rather than being decided at trial.
In 2015, UnitedHealth agreed to a $69 million settlement over alleged mismanagement of its 401(k) plan. Boeing also settled a long-running 401(k) lawsuit that year, agreeing to pay $57 million after nearly nine years of litigation.
Dell declined to comment, citing pending litigation. Lawyers for the plaintiffs did not respond to a request for comment.
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