Northern Trust will pay $2.5 million to settle an ERISA lawsuit relating to its former role as an investment adviser to AutoZone's 401(k) plan.
Terms of the settlement were filed Dec. 6 in a U.S. District Court in Memphis, Tenn., by attorneys representing former AutoZone employees and Northern Trust's attorneys. The parties reached an agreement in principle in October, but they didn't disclose the settlement's terms.
The plaintiffs sued AutoZone and its fiduciaries in November 2019 accusing them of allowing "exorbitant management costs" and "hidden trading costs." A motion to dismiss was rejected by a federal judge in September 2020.
Northern Trust Corp. and Northern Trust Investments Inc. were added as defendants in September 2021. Plaintiffs said Northern Trust failed to act prudently in reviewing the AutoZone plan's investments and failed to provide sufficient documentation for monitoring the plan's investments and expenses.
AutoZone and its fiduciaries are not part of the class-action settlement in the case of Iannone et al. vs AutoZone Inc. et al., which requires court approval.
"Defendants deny any such liability or wrongdoing and state that they are entering this settlement agreement to eliminate the burden and expense of further litigation," the settlement document said.
The AutoZone Inc. 401(k) Plan, Memphis, had $824.5 million in assets as of Dec. 31, 2022, according to the latest Form 5500.
