SEI Agrees to $2.75 Million 401(k) Settlement

The class settlement resolves claims that SEI Investments favored its own proprietary funds in an employee retirement plan.

Updated on Nov. 2, 2026 in Retirement Planning

SEI Agrees to $2.75 Million 401(k) Settlement

SEI Investments Co. has signed a $2.75 million class settlement resolving allegations that it improperly favored its own proprietary investment funds in its employees' 401(k) plan. The settlement would benefit about 8,600 people covered by the plan since January 2020, and SEI has filed a motion seeking preliminary approval from the court.

Why it matters

The case concerns whether plan sponsors may steer retirement savings toward their own investment products. SEI has also pledged to hire an outside investment manager to oversee its 401(k) fund lineup.

The settlement totals $2.75 million and would cover about 8,600 people in the plan since January 2020. The source does not state whether the court has ruled on the preliminary approval motion or how the payment would be distributed among participants.

The players

SEI Investments Co.

SEI Investments Co. is a Pennsylvania-based financial services and investment management firm that sponsors the 401(k) plan at issue.

Judge Joshua D. Wilson

Judge Joshua D. Wilson is the federal judge in the Eastern District of Pennsylvania who will consider SEI's motion for preliminary settlement approval.

The details

The lawsuit, filed in December 2025 in the U.S. District Court for the Eastern District of Pennsylvania, accused SEI of improperly favoring its own proprietary investment funds in employees' 401(k) plan. SEI signed the class settlement to resolve the allegations and filed a motion seeking preliminary approval from Judge Joshua D. Wilson.

January 2020: Coverage period for the settlement class begins.
December 2025: Lawsuit is filed in the Eastern District of Pennsylvania.
November 2, 2026: Settlement and approval motion are reported.

Market Dynamics

Under ERISA's fiduciary duty rules, plan sponsors must act solely in participants' interests when selecting plan investments, and this settlement shows those standards being enforced through private class litigation. The case reflects a broader scrutiny of proprietary fund offerings in 401(k) plans, as employers face pressure to justify fund menus that include their own products.

Participants in SEI's 401(k) plan since January 2020 may be eligible for a share of the $2.75 million settlement if the court grants preliminary approval. Workers who review their own plan menus can check whether proprietary funds are the default or only options, which affects how their retirement savings are invested.

The takeaway

Review your employer 401(k) fund lineup and compare fees and performance against low-cost index alternatives, since plan menus may favor the sponsor's own products. Confirm whether you are a participant in a class action before any settlement deadline.