Former American Express Employees Sue Over 401(k) Plan Fund Menu

American Express Co. filled its $9 billion 401(k) plan with poorly performing target-date funds that drained workers’ retirement savings, three former employees alleged in a proposed class complaint.

The credit card giant tapped a suite of customized target-date funds that consistently and significantly underperformed their benchmark as the default investment option for its 40,000-person retirement plan, the employees alleged. These fund drove lost earnings of up to $312 million over a five-year period, according to the complaint filed May 15 in the US District Court for the Southern District of New York.

• The company’s mismanagement of the plan was driven ...