Northrop Grumman Corp., agreed on a tentative settlement of an ERISA complaint against the company's 401(k) plan by offering to pay $12.4 million, according to a preliminary settlement notice filed Monday in U.S. District Court in Los Angeles.
This is the second part of a long-running ERISA suit against Northrop Grumman. Participants in two company retirement plans sued in 2006 and 2007. The cases were consolidated.
In June 2017, the company agreed to settle the consolidated complaint by paying $16.8 million to participants in the two 401(k) plans. It covered participants from Sept. 28, 2000, through May 11, 2009, prompting the plaintiffs' attorney to file another lawsuit in September 2016 to cover plaintiffs after May 11, 2009.
The latest preliminary settlement, which requires court approval, covers participants in the Northrop Grumman Savings Plan after May 11, 2009.
In the lawsuit, Marshall et al. vs. Northrop Grumman Corp. et al, participants accused the company and its fiduciaries of allowing "unreasonable" record-keeping fees. They contended that the fiduciaries failed to remove an underperforming emerging markets equity fund from the plan lineup. Plaintiffs also alleged that the company failed to monitor plan fiduciaries.
According to the preliminary settlement, the parties reached an agreement in principle on Oct. 15, 2019, just 14 minutes before a trial was scheduled to start. The plaintiffs are represented by the St. Louis law firm Schlichter Bogard & Denton, which also represented participants in the earlier cases.
The Northrop Grumman Savings Plan, Falls Church, Va, had $22.2 billion in assets as of Dec. 31, 2018, according to the latest Form 5500 filing.