Koch Industries has settled an 401(k) excessive-fee lawsuit, according to court records filed this week.
The company will pay $4 million to compensate participants in its plan, and it agreed to seek a more competitive rate for record-keeping services.
According to the complaint filed last year in U.S. District Court in the Northern District of Georgia, participants in the $8.1 billion master trust each paid as much as $146 for annual record-keeping fees in 2014 and as little as $53 in 2018. Koch failed to prudently select and monitor record-keeping services, the plaintiffs alleged.
The plaintiffs cited much more competitive rates of as little as $14 a year obtained by a plan that’s of similar size.
Alight Solutions, which is not a named party in the lawsuit, has been the record keeper since 2009. The plan has about 60,000 participants, according to the complaint.
Of the total settlement, as much as $1 million will go toward attorneys’ fees, the brief filed July 12 indicates. Law firm Nichols Kaster, as well as Austin & Sparks and Sanford Law Firm, brought the case on behalf of the class of plan participants.
VOYA SETTLES CLAIM
Financial services provider Voya settled a proposed class-action case this week that alleged the company charged access record-keeping fees to small retirement plan clients. Terms of the agreement were not made public.
A plaintiff brought the case against Voya in 2017, seeking relief on behalf of those in her 401(k) plan and others of similar size served by the record keeper.
Within her plan, Colorado-based Cornerstone Pediatric’s Profit Sharing Plan, participants reportedly paid as much as $1,819 per year each in record-keeping fees, according to the complaint. That plan represented about $3 million at the time the case was filed, though it grew to $4 million as of the end of 2019, data from the Department of Labor show.
The plaintiffs did not find much success in court, however. Early last year, the judge presiding over the case dismissed three of the claims. The court tossed claims of breach of fiduciary duties for charging excessive fees, a similar count of breach of co-fiduciary duties and a party-in-interest claim. All that remained were claims over breaches of fiduciary duty and co-fiduciary duty for providing false and misleading fee disclosures.
The lawsuit was filed in U.S. District Court in Delaware. Law firms Franklin Azar & Associates and Chimicles Schwartz Kriner & Donaldson-Smith represented the plaintiffs. Firms Pinckney Weidinger Urban & Joyce and Faegre Drinker Biddle & Reath represented Voya.
YUM ALLEGEDLY WITHHELD RETIREMENT BENEFITS
A longtime worker for the parent company of Taco Bell, Pizza Hut and KFC claims that he was wrongly classified as an independent contractor and therefore denied retirement benefits.
The plaintiff, Tim Alders, is seeking recognition for 25 years of work for benefits in the Yum Brands pension equalization plan, executive income deferral program and salaried retirement plan. Alders filed the case July 9 in U.S. District Court in the Central District of California and is represented by law firm Butterfield Schechter.
Alders, 63, worked for the company from 1995 to 2020 as an executive recruiter and was tasked with building an internal executive search and retention practice for Yum, according to the complaint.
“Plaintiff was so deeply involved with Yum and Yum-owned brands that over the many years of service, [he] became a cultural center piece due to the way he led with enthusiasm, caring for others, and making sure that everyone enjoyed each day through levity,” the complaint read. “For example, Taco Bell created what is called the annual ‘Tim Calendar’ as well as the ‘Tim Pillow,’ ‘Tim Socks’ and ‘Tim Drink Holder.’”
Alders should have been considered an employee, rather than independent contractor, because the company controlled his work and the way he performed it, he alleges. For example, he was required to work from about 8 a.m. to 6 p.m. at a private office at Taco Bell’s corporate headquarters, he stated.
Yum did not respond to a request for comment.
Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.