Lockheed Martin Corp., Bethesda, Md., settled an employee class-action lawsuit over 401(k) plan fees for $62 million Friday.
The lawsuit, filed in September 2006, represented more than 100,000 employees and retirees alleging that Lockheed Martin imprudently invested in funds with excessive record-keeping fees and high expense ratio fees that diminished returns. The lawsuit, Abbott vs. Lockheed Martin Corp., also faulted Lockheed for some money market fund investments with State Street Bank & Trust.
Plaintiffs represented by Schlichter, Bogard & Denton were seeking $1.3 billion in damages. In a statement, Lockheed Martin said it settled the lawsuit “so that we can return our focus to the critical and important work we are performing for our customers,” and noted that the settlement is not an admission of liability or wrongdoing.
Lockheed defined contribution plan assets total $27.7 billion.
Settlement talks began in December after U.S. District Court Judge Michael Reagan in East St. Louis, Ill., said he would not consider them once the trial got underway. The motion for Mr. Reagan to approve the settlement was also filed Friday.
Attorney Jerome Schlichter said in a statement that in addition to the financial terms, plan participants will benefit from other settlement conditions, including competitive bidding for services, annual reporting to the court and more transparency. The court will monitor the settlement for three years.
Lockheed said the settlement does not call for changes in its 401(k) policies and procedures.