Shub & Johns LLC launches an investigation into Amazon.com after the retail giant was accused of violating the Employee Retirement Income Security Act or ERISA. Amazon reportedly used forfeited 401(k) funds to cover its own contributions rather than reducing the fees for over 20,000 of its plan participants.

Amazon abusing 401(k) funds

Amazon has been accused of violating federal employment law by mismanaging the use of forfeited 401(k) funds. Participants of Amazon’s 401(k) can become fully vested, owning 100% of their own retirement plan, after only three years of employment and contribution. For those who do not or are unable to become, unfortunately, forfeit the matching funds previously contributed by the company.

These forfeited funds, rather than going to reduce the administrative fees for current participants, are allegedly being used to reduce Amazon’s own contributions to the retirement plans. Consumers therefore have to continue paying these administrative fees while Amazon contributes less. Between 2018 and 2023, plan participants forfeited approximately $349 million, an amount that could have easily covered the $18 million in administrative funds placed on consumers.

Plan participants feel as though Amazon violated ERISA by transgressing its fiduciary duties by not paying plan expenses and misusing the forfeited funds as designated by ERISA.

Are you an Amazon employee impacted by Amazon’s ERISA violations? Let us know! Fill out the attached form and join the Shub & Johns investigation today!