Dell Sued Over Target-Date Fund Returns in 401(k) Plan (1)

Five former Dell Technologies Inc. employees filed a proposed class action saying their 401(k) plan lost more than $318 million through poorly performing investments, including a suite of actively-managed target-date funds.

Dell mismanaged its employees’ 401(k) plan by offering target-date funds and other investments that underperformed better alternatives that were readily available from major vendors, the workers said in a complaint filed Wednesday in the US District Court for the Western District of Texas. The company evaluated these funds using “custom benchmarks” that failed to accurately capture their lagging performance, according to the lawsuit.

• Target-date funds, which are designed to ...