Bechtel Group Inc., San Francisco, settled a lawsuit with its 401(k) plan participants, according to court documents filed in U.S. District Court for the Northern District of California, San Francisco. Terms of the settlement were not disclosed.
Jerome Schlichter, managing partner at Schlichter, Bogard and Denton, who represented Bechtel's 401(k) plan participants, declined to comment on the settlement. Francis Canavan, spokesman for Bechtel, also declined to comment.
According to the court document, the final settlement still has to be submitted to presiding Judge Charles Breyer for final approval.
Bechtel has been involved since 2006 in the suit filed by participants alleging fees for the company's $4.2 billion 401(k) were unreasonable and improperly disclosed.
In its court argument, Bechtel said it was protected by a safe harbor defense under section 404(c) of ERISA. The section states if participants are ultimately making the decisions on how their 401(k) assets are invested, then sponsors are not responsible for any losses provided that participants have a broad range of options.
Last month, Mr. Breyer dismissed several key arguments in the lawsuit, writing that the underperformance of funds in the 401(k) plan does not render (Bechtel) liable for the structuring of the plan, despite the suit's claim that the company violated its fiduciary duty by maintaining imprudent investment options. Also, the judge significantly limited claims the Bechtel workers could pursue, noting that many of the original allegations over fees and Bechtel's decision-making were unsubstantiated.
Mark Bruno, a reporter at P&I's sister publication Financial Week, contributed to this story.