Oracle Corp. agreed to pay $12 million to settle a class-action lawsuit filed against the firm for allegedly breaching its fiduciary duties in managing its $16.5 billion 401(k) plan.
The suit, filed in 2016, alleged that Redwood City, Calif.-based Oracle caused participants of its 401(k) savings and investment plan "to pay unreasonable record-keeping and administrative fees" to its record keeper, Fidelity Management Trust Co.
The class action also alleged that the plan sponsor retained at least three investment options — Artisan Partners' Artisan Small Cap Value Fund, TCM Small-Mid Cap Growth Fund and Pacific Investment Management Co.'s PIMCO Inflation Response Multi-Asset Fund — that "consistently underperformed their designated benchmarks … (and) other funds of the same investment style, charged excessive fees, and paid revenue sharing to Fidelity far beyond a reasonable rate for the services provided."
The suit also accused Oracle of failing to monitor the performance of the other plan fiduciaries.
"We're pleased that the Oracle employees and retirees will not only receive compensation for the past, but also that they will have an improved plan going forward, enabling them to build their retirement assets," said Jerome Schlichter, founding and managing partner of Schlichter Bogard & Denton and lead counsel for the plaintiffs, in an email. "The record keeper also will not be able to use the participants' confidential personal and financial information to market and sell non-plan services and products."
Oracle spokeswoman Julie Sugishita Cantor declined to comment.