Ex-Dell Employees Sue, Claiming $318M Losses from Retirement Plan Mismanagement

BREAKING: Five former employees of Dell Technologies have filed a lawsuit against the tech giant, alleging severe mismanagement of its retirement plan that has reportedly cost workers a staggering $318 million. The complaint, submitted on January 28, 2024, in a federal court in Texas, accuses Dell of keeping employees’ investments in underperforming funds while superior options were available.

The plaintiffs, consisting of Allison Lowbruck, Adam Moss, Eric Rodgers, Michael Schwartz, and John Vedamanikam, argue that Dell’s retirement plan managers failed to adequately oversee and replace poorly performing investment options. Among these are the Dell Pre-Mixed Portfolio Target Date Series and Dell Core Funds, which consistently lagged behind comparable market funds.

According to the lawsuit, these decisions are not merely unfortunate; they constitute violations of the Employee Retirement Income Security Act (ERISA). The plaintiffs assert that Dell’s actions led to “massive underperformance” of the retirement plan, resulting in the significant financial detriment to its participants.

“The participants in the Plan suffered financial harm as a result of the Plan’s imprudent investment options,” the lawsuit states, highlighting the deep impact on employees’ financial futures. The 401(k) plan currently serves around 63,000 current and former Dell employees, with approximately $14.6 billion in assets as of 2024.

The lawsuit seeks to recover the alleged losses incurred by plan participants, as well as any fees believed to have been generated through self-dealing practices. Additionally, the plaintiffs are demanding changes to Dell’s retirement plan management and the removal of individuals who have breached their fiduciary duties.

Similar lawsuits have been filed against large corporations in the past, often leading to settlements rather than trials. Notably, in 2015, UnitedHealth settled for $69 million over 401(k) mismanagement, while Boeing agreed to a $57 million settlement after nearly nine years of litigation regarding similar allegations.

As this case unfolds, the implications for Dell and its employees may be significant, potentially reshaping how the company’s retirement plans are administered in the future. Dell has declined to comment on the matter, citing ongoing litigation, while legal representatives for the plaintiffs have not responded to inquiries.

Stay tuned for more updates as this urgent situation develops, impacting thousands of employees and their financial security.