Civil Plaintiff

$28.5M Settlement Reached in Fidelity 401K Lawsuit

The nation’s largest recordkeeper has come to terms with participants in its own 401(k) regarding allegations of excessive recordkeeping fees, along with some changes in practices.

Under the terms of the proposed Settlement, Fidelity will cause its insurers to pay a gross settlement amount of $28,500,000 into a common fund for the benefit of the Class. The agreement—which must still be approved by the court—claims to provide “the Class that falls well within the range of court-approved settlements in similar ERISA cases, and provides the Class with essentially a full recovery[i] of the alleged damages for failure to monitor recordkeeping fees (which partially overlapped with alleged damages associated with the failure to monitor certain Fidelity funds).”

The settlement also provides that “one or more Plan fiduciaries will (1) undertake to monitor Plan recordkeeping fees; and (2) undertake to monitor the Plan’s investment options, other than any investments available through the Plan’s self-directed brokerage account.” This, the settlement says “…directly address the Court’s finding in its Case Stated Order that Fidelity ‘fail[ed] to monitor proprietary funds other than the two DIAs, and … fail[ed] to monitor recordkeeping expenses.’”

Read the source article at National Association of Plan Advisors

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