A settlement has been reached in two lawsuits accusing Safeway retirement plan fiduciaries and Aon Hewitt Investment Consulting, Inc. of causing excessive investment and recordkeeping fees to be charged for the plan.
The settlement amount is comprised of $8,000,000.00 that Safeway will pay or cause to be paid to the Settlement Fund, and $500,000.00 that Aon will pay or cause to be paid to the Settlement Fund
According to the settlement agreement, nothing in it “shall be deemed to constitute any finding or admission of any wrongdoing or liability by any of the Defendants.”
In April, a federal judge in the U.S. District Court for the Northern District of California issued an order granting in part and denying in part Safeway defendants’ motions for summary judgement, while also denying as moot defendant Aon Hewitt’s motion for reconsideration.
The lawsuit questioned investment and revenue sharing fee agreements, reached first with J.P. Morgan Retirement Planning Services and later continued with Great-West. Great-West was at one point removed as a defendant in the lawsuits.
In one complaint, the plaintiff alleged that the Safeway defendants “breached their fiduciary duty of prudence by selecting funds that charged higher fees than comparable, readily-available funds, and which had no meaningful record of performance so as to indicate that higher performance would offset this difference in fees; and entering into and maintaining a revenue-sharing agreement with the plan’s recordkeepers … that resulted in excessive compensation to those entities.”The plaintiff furthered claimed that the “revenue-sharing agreement constituted a prohibited transaction under ERISA for which the Safeway defendants (as fiduciaries) and Great-West (as a party in interest) are both liable.”
« ICMA-RC Fighting for CIT Availability for 403(b)s