International Paper Files to Settle 401(k) Fees Suit
In the case of Beesley v. International Paper Company, both parties recently filed a joint motion for settlement in the U.S. District Court for the Southern District of Illinois. The suit, which dates back to 2006, alleged the fiduciaries responsible for overseeing the company’s retirement plans breached their duties under the Employee Retirement Income Security Act (ERISA) by “causing the plans to pay excessive fees, failing to capture revenue for the benefit of the plans, and imprudently causing the plans to invest in two particular plan options” (see “IPC: 401(k) Fees Not Excessive or Unreasonable”).
As of September 30, the plaintiff and defendant entered into a settlement agreement and requested the district court preliminarily approve that agreement. The agreement defined the settlement class as all participants in the International Paper Company Salaried Savings Plan or the International Paper Company Hourly Savings Plan, excluding the defendants, whose plan accounts had balances greater than zero at any time between January 1, 1997, and May 31, 2008. The class also includes beneficiaries of those who “participated in the plans at any time during the class period, and/or, alternate payees, in the case of a person subject to a qualified domestic relations order who participated in the plans at any time during the class period” (see “Court Oks Class Actions for ERISA Cases”).
As part of the settlement, the defendant asked for a release of claims from the plaintiff and in return agreed to pay $30 million into a gross settlement fund and to institute affirmative relief as detailed in the settlement agreement.
The district court will schedule a fairness hearing with the intent of receiving evidence, arguments or objections relating to the settlement agreement. Following that hearing, the court will grant final approval of the settlement and dismiss the plaintiff’s lawsuit.
The motion for settlement document can be found here. The settlement agreement can be found here.