Krueger v. Ameriprise Financial, Inc. - Blog

CASE 0:11-cv-02781-SRN-JSM Document 67 Filed 11/20/12 Page 10 of 44
Plaintiffs also contend that Defendants selected the more expensive share classes
of the RiverSource funds, even though the Plan qualified for shares with lower fees. (Id.
62.) Plaintiffs state that “Defendants used the R4 share class of the RiverSource Mutual
Funds, even though Defendants could have used the Mutual Funds’ R5 share class, which
charged . . . lower [fees] . . . for identical investment management.” (Id.) Additionally,
Plaintiffs claim that the more expensive shares added a fee of “up to 25 bps for ‘Plan
Administrative Services’” and a “service fee up to 10 bps, even though they provided no
additional benefits or services for the participants in the Plan.” (Id. 63; Pls.’ Mem. at p.
14.) Plaintiffs contend that shareholders outside of the Plan “invested in the R4 share
class under terms far more favorable than those provided to Plan participants.” (Id. 64.)
Indeed, for R4 shareholders outside the plan, a portion of their fees were “rebated or used
to directly offset administrative fees and expenses in their plans”—a benefit that was not
available to Plan participants, whose fees were retained by Ameriprise affiliates. (Id.
64–65) Plaintiffs conclude that “[b]y investing in the R4 share class of RiverSource
Retirement Plus funds, Defendants caused [the funds] in the Plan to pay more than
double the additional fees RiverSource received for managing the funds compared to
what they would have paid had they been allowed to invest in the R5 share class.” (Id.
75.)
Plaintiffs also allege that the RiverSource funds selected for the RiverSource
Retirement Plus funds have “poor risk adjusted returns.” (Id. 76.) For example, a
report prepared by Plan Sponsor and Target Date Analytics, LLC, measuring the fees,
performance, risk, and organization of “38 target date fund families as of December 31,
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