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MFS Is Latest Asset Manager Sued Over In-House 401(k) Funds

July 10, 2017, 4:00 AM

Massachusetts Financial Services Co. filled its workers’ 401(k) plans with expensive, proprietary mutual funds, causing workers to pay plan fees more than 90 percent higher than those of similarly sized retirement plans, a new lawsuit alleges (Velazquez v. Mass. Fin. Servs. Co., D. Mass., No. 1:17-cv-11249, complaint filed 7/7/17).

The proposed class action, filed July 7 in a federal court in Massachusetts, accuses MFS of mismanaging its 401(k) plans—which together hold more than $500 million in assets—by offering high-cost funds affiliated with the company and by failing to investigate lower-fee investment options, like separate accounts, collective trusts, and...

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