Wells Fargo $84M ESOP 401(k) Class Action Settlement

Current or former employees who participated in or held a portion of their account in the Wells Fargos 401(k) Plan’s Employee Stock Ownership Plan (ESOP) Fund between September 27, 2016, and December 30, 2022, may be eligible to receive a share of an $84 million class action settlement.

Wells Fargo & Co. has agreed to pay $84,000,000 to settle a class action lawsuit for alleged breaches of fiduciary duty and prohibited transactions under the Employee Retirement Income Security Act (ERISA). The plaintiffs claimed that Wells Fargo improperly used dividends from ESOP-held preferred stock to offset employer contributions to the 401(k) Plan, and that GreatBanc Trust Co., the ESOP’s independent fiduciary, knowingly participated and failed to prevent these actions.

Who is eligible to receive a Wells Fargo payment?

Class members must meet the following criteria:

• They are a current or former employee who participated in the Wells Fargo & Co. 401(k) Plan at any time between September 27, 2016, and December 30, 2022.
• They held any portion of their plan account in the Wells Fargo ESOP Fund during the qualifying period.

How much is the settlement payout?

• Current plan participants: Settlement payment amounts will be determined by the plan of allocation and will be based upon the amount of each class member's holdings in the ESOP fund during the class period.
• Former participants: Settlement payment amounts will also be determined by the plan of allocation and will be based upon the amount of each class member's holdings in the ESOP fund during the class period. Payments will only be issued to former participants if they are $10.00 or more.

No claim form required

• Class members do not need to file a claim to receive a settlement payment.
• Former participants can file a rollover election form online, using the Unique ID and PIN from the settlement notice, in order to roll over their settlement payment to a qualified retirement plan or IRA.

Payout options

• Current plan participants will have their settlement payment deposited in their plan account.
• Former plan participants that do not submit a rollover election form will receive a paper check mailed to the address on file.

$84 million Wells Fargo settlement fund

The settlement fund of $84,000,000 will include:

• Settlement administration costs: Up to $300,000
• Attorneys’ fees: Up to $21,000,000
• Attorneys’ litigation cost and expenses: To be presented to the court for approval at a later date
• Service awards to class representatives: Up to $25,000 each, $75,000 total
• Payments to class members: Remaining settlement funds

Important dates

• Rollover form deadline: Feb. 26, 2026
• Fairness hearing: March 17, 2026

When is the Wells Fargo ESOP settlement payout date?

Payments will be issued to current participants approximately 75 days after after the court grants final approval of the settlement. Payments to former participants will be issued approximately 60 days after the final approval date.

Why was there a class action settlement?

This class action settlement resolves claims that Wells Fargo & Co. and other defendants breached fiduciary duties and engaged in prohibited transactions under ERISA by using dividends from ESOP-held preferred stock to offset employer contributions to the 401(k) Plan. Plaintiffs alleged these actions harmed the Plan and its participants.

Wells Fargo and GreatBanc Trust denied the allegations, however agreed to settle to avoid the expense and risk of continued litigation and a possible trial.

Sources

1. Class notice
2. Settlement website FAQ page
3. Settlement agreement