General Dynamics Corp. received final court approval Tuesday for a $15.5 million settlement of a class-action lawsuit alleging the company violated its fiduciary duties by allowing Fiduciary Asset Management to charge excessive fees to participants in two company 401(k) plans, confirmed Rob Doolittle, a General Dynamics spokesman.
In a news release, General Dynamics, Falls Church, Va., and Fiduciary Asset Management officials said they complied with their ERISA obligations in running the two plans, which have combined assets of about $6 billion.
“However, the parties have determined that it is in their best interest, and General Dynamics has determined that it is also in the best interest of General Dynamics' employees, 401(k) plan participants and shareholders, to resolve the lawsuit by settlement,” the release said.
In an interview, Jerome Schlichter, founding partner of Schlichter, Bogard & Denton, the law firm that filed the suit, said that under the terms of the settlement, “General Dynamics will take steps to maximize participants' returns, including using an outside consultant, using an independent fiduciary, providing enhanced fee disclosures, continuing to pay record keeping on a per-participant — not asset — basis, and providing plan discounts from investment managers who also provide services to General Dynamics' defined benefit plans.”
Mr. Schlichter's firm will receive $5 million in fees and about $693,000 in costs that G. Patrick Murphy, U.S. District judge in East St. Louis, Ill., ordered as part of the settlement.