Lowe's Cos., Mooresville, N.C., settled a lawsuit filed by a participant in its 401(k) plan who alleged the company and its administrative committee breached their fiduciary duties in the plan's offering of an investment option.
The settlement, disclosed in a May 28 court filing in U.S. District Court in Statesville, N.C., provides for a $12.5 million settlement fund from which participant class members are entitled to distributions. The settlement affects plan participants who were invested in the Aon Growth Fund at any time on or after Oct. 1, 2015.
Plaintiff and 401(k) plan participant Benjamin Reetz sued in April 2018 alleging that Lowe's, its administrative committee and investment consultant Aon Hewitt Investment Consulting (now Aon Investments USA) had breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 by offering the fund.
No settlement has been reached with co-defendant Aon.
Mr. Reetz accused Aon, the plan's investment consultant, of "a conflict of interest in recommending this proprietary fund for the plan, and improperly did so to further its own financial interests instead of the interests of the plan's participants," the original lawsuit said.
Lowe's petitioned the court to dismiss the case, but U.S. District Court Judge Kenneth D. Bell denied part of the request but granted some of the company's petition in September 2019, allowing the case to go to trial.
Partners at the Groom Law Group, the plaintiff's attorney, and Lowe's officials, could not be immediately reached for comment.