Koch Industries agreed to pay $4 million to settle a lawsuit accusing the company of allowing the record keeper of its 401(k) and other defined contribution plans to charge excessive fees in violation of ERISA.
The preliminary settlement agreement, which was filed Monday in federal court in Atlanta, now awaits court approval.
The class action, filed July 16, 2020, by David Kinder and Tracy Scott, said that Koch Industries breached its fiduciary responsibilities as administrator of the $8.1 billion Koch Companies Defined Contribution Master Trust, by failing "to prudently and loyally monitor and control" the expenses incurred by the plans' record keeper, Alight Solutions. Alight was not named in the suit, Kinder et al. vs. Koch Industries Inc. et al.
The complaint further said that Alight charged "up to six times more than what similarly sized plans would have paid for such services," and that these actions cost the plans and their participants "millions of dollars in excessive fees."
David Dziok, a spokesman for Koch Industries, and Kai H. Richter, a partner at the law firm Nichols Kaster PLLP and attorney for the plaintiffs, could not be immediately reached for comment.