Actively managed funds, which have professionals picking the investments, typically come with higher costs than index funds, which require no such expertise because they track an index, such as the Standard & Poor's 500.
Despite these court rulings, a dozen or so similar cases against investment managers — involving well-known companies like American Century and Edward Jones — are pending or have continued moving through the court system.
Just last week, MFS Investment Management became the latest firm to face allegations. In that case, the plaintiff claims that using expensive in-house funds cost its participants "tens of millions of dollars" due to high fees and poor returns.
"We stand firmly behind the investments offerings in our employee retirement plans and process in selecting these options," MFS spokesman Daniel Flaherty said in a statement.
Some cases have ended with a settlement. American Airlines recently agreed to settle a similar suit for $22 million. In that case, plaintiffs claimed the company profited at plan participants' expense by using high-cost funds offered by an affiliated investment manager. And in May, TIAA-CREF agreed to pay $5 million in a suit involving charges of self-dealing that led to overpaying in administrative and investment management fees.