The the lawsuit Kanawai v. Bechtel Corp, a US District Court judge has granted final approval of an $18.5 million settlement over excessive 401k fees. In the suit, two former employees of Bechtel Corp. alleged that the company violated its Employee Retirement Income Security Act (ERISA) responsibilities when it did not use its size to get the lowest fees from vendors. Under the settlement, Bechtel agreed for a three-year period to take certain corrective actions.
These include not using any of its own affiliates to act as the investment manager for the 401k plan, enhancing the disclosures it makes about investment fees, not offering any retail mutual fund as an investment option and prohibiting the plan's account managers from investing in retail mutual funds, among others. Each named plaintiff in the suit was awarded a $7500 incentive award.
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