Krueger v. Ameriprise Financial, Inc. - Blog

CASE 0:11-cv-02781-SRN-JSM Document 67 Filed 11/20/12 Page 6 of 44
Schwab is the trustee for assets in the SMBA. (Sabin Decl. Exs. 11–13; Am. Compl. 10–
12.) Under the Plan’s terms, Plan administration and reasonable trustee expenses are to be
paid from Plan assets. (Sabin Decl. Ex. 10 § 10.7.)
B. Plaintiffs’ Amended Complaint
Plaintiffs are three current and four former participants in the Plan who seek to
represent a class of all participants in and beneficiaries of the Plan since its inception in
October 2005. (Am. Compl. 1, 13–19, 105.) Plaintiffs allege that the Plan has invested
“hundreds of millions of dollars in mutual funds managed by Ameriprise subsidiaries
RiverSource . . . as well as, commingled trusts managed by ATC” despite “many
investment options available in the market.” (Id. 53–54.) Plaintiffs claim that these
investment options were “chosen because they were managed by, paid fees to, and
generated profits for Ameriprise, its subsidiaries, and Wachovia.” (Id.) Plaintiffs state
that the Plan’s investment in RiverSource and ATC averaged approximately
$500,000,000 per year from October 1, 2005 to the present. (Id. 57.)
Plaintiffs note that Defendants invested in RiverSource mutual funds, which were
newly created when the target maturity funds invested in them and had no performance
history. (Id. 78.) Indeed, the “Plan was the first investor in the Funds.” (Id.) Plaintiffs
claim “Ameriprise used the retirement assets of [its] employees to seed new and untested
mutual funds, which made those funds more marketable to outside investors, thus
increasing profits for RiverSource and its parent, Ameriprise.” (Id.)
Plaintiffs further allege that the RiverSource mutual funds that the Plan invested in
performed poorly. The funds underperformed their benchmarks each year by 0.62%,
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