Neuberger Berman Group agreed to pay $17 million to settle a class-action ERISA complaint against the company's 401(k) plan fiduciaries.
The preliminary settlement agreement, which will require court approval, is based on a lawsuit filed in August 2016 by a plan participant who accused plan executives of self-dealing by retaining a Neuberger fund — the Value Equity Fund — that they alleged charged high fees and performed poorly.
The complaint said ERISA violations occurred because fiduciaries allowed the plan "to pay excessive fees to a Neuberger affiliate and by keeping the VEF in the plan despite deteriorating performance and high fees," said a notice of a preliminary settlement filed June 10 in a U.S. District Court in New York by the plaintiff's attorneys.
The parties reached an agreement in principle on March 23 but didn't disclose the terms.
"Defendant denies any breaches or ERISA violations," said the proposed settlement document, which is unopposed by the defendant in the case of Bekker CQ vs. Neuberger Group 401(k) Investment Committee.
The parties reached an agreement in principle on March 23 but didn't disclose the terms.
The settlement covers participants who invested in Value Equity Fund between June 15, 2016 and Dec. 16, 2019.
"Defendant has already removed the VEF from the plan, negating the need for additional relief through additional affirmative plan changes," said the document, which didn't disclose when the fund was removed.
The Neuberger Group 401(k) Plan had $1.04 billion in assets as of Dec. 31, 2018, according to the latest Form 5500.
