One concession from the plaintiff's own lawyer ended the case – benefits teams should still watch
Wells Fargo has fended off a class action over how it spends forfeited 401(k) match dollars, and benefits leaders should take note.
In a decision dated May 12, 2026, the US Court of Appeals for the Eighth Circuit affirmed the dismissal of a lawsuit brought by Thomas O. Matula, Jr., a Wells Fargo employee. Matula sued the bank along with the Human Resources Committee of its board and its Employee Benefits Review Committee. He argued the company's choice to use forfeited matching contributions to offset its own employer contributions breached fiduciary duties under the Employee Retirement Income Security Act, the federal law that governs workplace retirement plans.
The math behind the dispute is simple. Wells Fargo matches up to six percent of what employees put into their 401(k) accounts. Worker contributions vest right away. The company match vests over three years. Employees who leave before that three-year mark forfeit any unvested match dollars back to the plan. In 2022 alone, those forfeitures added up to roughly $2 million.
Under the plan rules, Wells Fargo had sole discretion to do one of three things with the forfeited money: offset its own contributions, pay plan expenses, or make corrective adjustments to accounts. It picked offset, reducing what comes out of the company treasury to meet its match obligations.
Matula filed his class action on June 11, 2024. He argued...
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