Employers Alarmed by Rise in Target-Date Fund 401(k) Lawsuits

Set-it-and-forget-it funds millions of Americans use to save for retirement at work are increasingly at the center of federal lawsuits alleging underperformance, posing new risks for employer sponsors who rely on them.

Target-date funds automatically reshuffle investments over a period of decades to maximize returns as retirement approaches, but workers at major companies are accusing their employers of failing to prudently monitor them over short, three-to-five-year windows.

JPMorgan Chase & Co.‘s SmartRetirement Funds are implicated in the latest phase of litigation brought by participants in an Intermountain Healthcare Inc. subsidary’s plan earlier this month. Nearly a dozen companies were ...