Former Employees Sue Trader Joe’s Over 401(k); Hearing, Motions Set

Six former employees filed Stephen et al. v. Trader Joe’s Co. et al. on Jan. 28, 2025 in the U.S. District Court for the District of Massachusetts, alleging the grocer’s retirement plan concentrated roughly 70% of assets in the American Funds American Balanced Fund R4 until 2021 and charged participants excessive fees, according to the complaint excerpts reported by Bloomberg Law and Plansponsor.

Plaintiffs accuse plan fiduciaries of breaching their duties by keeping the higher‑cost R4 share class in place instead of swapping to cheaper vehicles. As the complaint states, “To the financial detriment of plaintiffs and the participants, the R4 share class of the American Balanced Fund saddled the participants with needlessly high fees,” and “The facts show that defendants wholly failed to fulfill their fiduciary obligations in regard to monitoring plan investments and ensuring all fees paid by the plan and participants were reasonable and necessary,” Plansponsor reported.

The filing names The Trader Joe’s Co., its board of directors and its investment committee as defendants and also singles out Capital Research (variously described in sources as Capital Research & Management Co. or Capital Group) as the plan’s recordkeeper and the investment adviser to American Funds. Plaintiffs are represented by attorneys from Jeffrey Hellman, Capozzi Adler and Muhic Law LLC.

Allegations over administrative fees vary across filings and commentary. JD Supra’s summary quotes plaintiffs as saying the “$1.6 billion plan” faced recordkeeping charges “based on a percentage of assets” that “came in at $140 a head” when fees should be “closer to $40 a head.” Plansponsor cites the complaint as saying Capital Group charged $48 per participant for recordkeeping services and calls that fee “grossly excessive” given the plan’s scale.

Plansize figures diverge in source material. Plansponsor cites the plan’s 2023 Form 5500 showing “more than $2.7 billion in assets under management and 44,218 participants with account balances at the end of the plan’s year in 2023.” Bloomberg reports that about 70% of the plan, nearly $2 billion, was invested in the American Balanced Fund R4 until 2021, while JD Supra and 401k Specialist refer to a $1.6 billion-plus figure for the plan.

Plaintiffs also allege misuse of forfeiture funds, claiming the company “was accused of using millions of dollars in plan assets, obtained from participant forfeited funds, for its own benefit by using funds to reduce future company contributions,” per Plansponsor, and they fault the plan for failing to offer a target date suite.

The docket was updated Feb. 19, 2026, with motions and a hearing set, according to the case summary; the sources provided do not include the motion titles, hearing date, or judge assigned. The complaint raises familiar ERISA themes that ran through earlier litigation: Holland & Knight notes a prior case, Marks v. Trader Joe’s Co., in which a Central District of California judge found prior plaintiffs’ fee estimates to be “a pure guess” and dismissed ERISA claims and injunctive relief for lack of standing on Apr. 24, 2020.

How the court resolves the factual disputes over plan size, fee metrics and share‑class choices, and whether it follows the Marks precedent on standing and speculative pleading, will determine whether the Stephen complaint survives early motions and proceeds to discovery.