Two Companies Sued Over 401(k) Target-Date Fund Choices

Lawsuits claim funds from American Century Investments underperformed for years

Published on Feb. 21, 2026

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Two new lawsuits have been filed against employers over the target-date funds in their 401(k) plans. The cases target electronic components maker Digi-Key Corp. and casino company Boyd Gaming Corp., alleging the companies should have swapped out the underperforming target-date funds from American Century Investments for better alternatives.

Why it matters

Target-date funds are a popular investment option in 401(k) plans, but employers have a fiduciary duty to monitor the performance of these funds and make changes when they consistently underperform. These lawsuits highlight the legal risks companies face if they fail to properly oversee their 401(k) plan investments.

The details

The lawsuits, filed in federal courts in Nevada and Minnesota, claim the target-date funds from American Century Investments have performed poorly for years and should have been replaced with better-performing alternatives. American Century Investments is not named as a defendant in either lawsuit.

  • The lawsuits were filed in February 2026.

The players

Digi-Key Corp.

An electronic components manufacturer based in Minnesota.

Boyd Gaming Corp.

A casino company based in Nevada.

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What’s next

The courts will now consider the merits of the lawsuits and whether the employers breached their fiduciary duties in overseeing the 401(k) plan investments.

The takeaway

These lawsuits underscore the importance of employers closely monitoring the performance of target-date and other 401(k) investment options, and making changes when funds consistently fail to meet benchmarks or investor expectations.