nAbbott et al vs. Lockheed Martin Corp. et al. A class-action settlement was announced Feb. 20 in which the company agreed to pay $62 million to participants in two 401(k) plans. The settlement, subject to final approval by a U.S. district court judge in East St. Louis, Ill., was based on a complaint filed in 2006 alleging the plan charged excessive fees and ran a poor performing stable value fund, among other things. During the three-year settlement period, Lockheed agreed to file with the court annual fee disclosure reports on its stable value and company stock funds, and annual reports describing the use of money market instruments in the stable value fund and cash equivalents in the company stock fund. Lockheed also agreed to initiate competitive bidding for record keepers.
nHaddock et al vs. Nationwide Life Insurance Co. and Nationwide Financial Services Inc. A settlement was announced in December 2014 and is awaiting final approval by the U.S. District Court in Bridgeport, Conn. The initial complaint was filed in August 2001. Settlement of this class-action suit covers trustees of some 24,000 plans that had variable annuity contracts with Nationwide. Terms include Nationwide paying $140 million to settle allegations that it received undisclosed revenue-sharing payments from non-proprietary mutual funds. Nationwide agreed to greater disclosure about new group variable annuity products and about mutual fund fees.
nBilewicz et al vs. FMR et al. The settlement was approved in October 2014 by the U.S. District Court in Boston. The initial complaint was filed in March 2013 alleging, among other things, that Fidelity Investments' 401(k) plan contained unnecessarily high-fee mutual funds that were Fidelity proprietary funds. Settlement terms of the class action suit included payment of $12 million to participants; inclusion of more non-Fidelity and lower-priced Fidelity mutual funds in the 401(k) lineup; and equal treatment of revenue-sharing for Fidelity funds and non-Fidelity funds.
nHealthcare Strategies Inc. et al vs. ING Life Insurance Annuity Co. The settlement was approved in September 2014 by the U.S. District Court in New Haven, Conn. The initial complaint was filed in February 2005, alleging, among other things, that the unit of ING U.S. (now known as Voya Financial) improperly characterized certain revenue-sharing payments from mutual funds to 401(k) and 401(a) plans. Settlement terms of the class-action suit included a payment by ING of $14.95 million as well as greater disclosure of investment menu changes, fees and expenses as well as enabling new investors to choose options that exclude revenue-sharing.
nBeesley et al vs. International Paper Co. et al. The settlement was approved in January 2014 by the U.S. District Court in East St. Louis, Ill. The initial complaint was filed in September 2006, alleging, among other things, that fiduciaries of two company 401(k) plans paid excessive management and record-keeping fees, and that two investment options — including a company stock fund — were imprudent investments. Settlement terms of the class-action suit include payment $30 million to participants. During the four-year settlement period, plan executives won't prohibit employees from transferring their funds out of the company stock fund and won't offer retail-priced mutual funds, the settlement document said. The settlement also required competitive bidding for record keeping and the introduction of a passively managed large-cap stock option.
