Safeway Inc., Pleasanton, Calif., and Aon Hewitt Investment Consulting Inc. have reached an agreement to settle a class-action lawsuit claiming participants in Safeway's 401(k) plan were charged excessive fees.
Safeway and Aon Hewitt will pay a combined $8.5 million to settle the lawsuit, according to court documents filed Sept. 13 in U.S. District Court in Oakland, Calif. The lawsuit was first filed in 2016. Originally, the plan's record keeper, Empower Retirement, was a defendant in the case, but a judge dismissed claims against it in 2017. Aon Hewitt, the plan's former independent investment adviser, was added as a defendant in 2017.
The lawsuit claimed that Safeway breached its fiduciary duties by selecting a target-date fund lineup that "charged excessive fees as compared to readily available alternatives," the original filing said.
As part of the settlement, Safeway and Hewitt did not admit to any wrongdoing. "This agreement and the consideration provided hereunder are made in compromise of disputed claims and are not admissions of any liability of any kind, whether legal or factual," the court documents said. "The defendants specifically deny any such liability or wrongdoing, and Safeway and Aon state that they are entering into the agreement solely to eliminate the burden and expense of protracted litigation."
As of Dec. 30, 2017, the Safeway 401(k) Plan had $1.7 billion in assets, according to the company's most recent Form 5500 filing.
Todd M. Schneider, partner at law firm Schneider Wallace Cottrell Konecky Wotkyns, attorney for the plaintiffs, as well as officials at Safeway and Aon Hewitt could not be immediately reached to provide comment.