Boeing employees and retirees have reached a final settlement of $57m in the 401k excessive fees case, Spano versus Boeing.
The settlement amount is the second highest in excessive 401k fee litigation after the $62m settlement achieved on behalf of Lockheed Martin employees and retirees in July of this year.
The plaintiffs for both cases were represented by St. Louis based law firm Schlichter, Bogard & Denton.
“We are pleased to have reached this settlement for Boeing’s employees and retirees. In addition to the financial terms, improvements and fee reductions obtained after filing the case are already benefiting Boeing employees and retirees, and will continue to do so for many years to come,” said Jerry Schlichter, Managing Partner at Schlichter, Bogard & Denton and Lead Attorney for plaintiffs.
“This settlement, the culmination of over nine years of litigation, signifies our commitment to improving the 401k savings plans that Americans rely on for a secure retirement.”
Mike Alfred, Co-Founder and CEO of BrightScope, an independent firm that provides services for retirement planning and wealth management, notes that Schlichter, Bogard & Denton has had a “humongous” impact on reducing 401k fees across the industry, and multiple federal courts have called Mr. Schlichter and his firm a “private attorney general” for its pursuit of these cases.
A joint motion for approval of the settlement was filed today by the parties in the Court of Chief Judge Nancy J. Rosenstengel of the U.S. District Court for the Southern District of Illinois.
In a complaint originally filed on September 28, 2006, the plaintiffs alleged that Boeing breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA). Plaintiffs alleged that Boeing mismanaged the 401k plan to the detriment of its employees in violation of its fiduciary obligations by: allowing the recordkeeper, CitiStreet, to charge employees and retirees excessive fees; failing to obtain bids; and placing expensive and risky investment options in the plan, costing a loss of retirement assets to employees and retirees.
Boeing denied all of the allegations and contended it complied in all respects with the law.
After the case was filed, Boeing obtained competitive bids, resulting in significant saving for employees and retirees, and replaced mutual funds with lower priced separate accounts. Boeing has agreed to retain an Independent Investment Consultant to review or not to offer a technology sector fund in the plan, and has also agreed to the Court retaining jurisdiction to enforce the settlement for three years.