Boeing Co. has agreed to pay $57 million to end a lawsuit accusing the aerospace company of mishandling its 401(k) plan by offering imprudent investment options and passing on excessive fees to employees.

The settlement, which needs a federal judge's approval, would be among the largest payouts stemming from suits accusing employers of violating the Employee Retirement Income Security Act, or Erisa. Earlier this year, Lockheed Martin Corp. paid $62 million to settle allegations of 401(k) mismanagement. In 2013, Cigna Corp. paid $35 million in a similar suit.

The Boeing case involved accusations the company failed to uphold its fiduciary duties to employees, by allowing excessive 401(k) fees to go unchecked, choosing higher-cost retail mutual funds over cheaper options and improperly making 401(k) plan decisions to benefit vendors receiving other Boeing business.

Boeing, which has defended its retirement plan practices and has lowered some fees since the suit was filed, didn't immediately respond to a request for comment Thursday. The details of the settlement emerged for the first time Thursday in a filing in Illinois federal court.

Boeing has been the largest target to date of a plaintiffs' lawyer who has made a career over the past decade of filing class actions over alleged Erisa violations. The parties arrived in court in August to go to trial in the Boeing lawsuit, filed in 2006 on behalf of 190,000 Boeing employees and retirees, but agreed to strike a deal moments before jury selection began.

The settlement is the ninth such deal St. Louis lawyer Jerome Schlichter has reached with major companies, resulting in more than $271 million in payouts. Of that, around a third has gone to Mr. Schlichter and his law firm, Schlichter Bogard & Denton LLP.

Six other Erisa cases he's brought are pending, including one that went to the U.S. Supreme Court earlier this year.

In that case, against Southern California utility Edison International, the high court ruled unanimously that companies have a continuing duty under Erisa to monitor and remove imprudent investments included in a retirement plan.

Boeing's $44 billion 401(k) plan is the second-largest in the nation after International Business Machines Corp., according to the Labor Department.

Many Americans have come to rely on 401(k) plans for their retirement: Of the $24.8 trillion in U.S. retirement assets at the end of June, nearly 19% was in 401(k) plans, according to the Investment Company Institute, a mutual-fund trade group.

Write to Sara Randazzo at sara.randazzo@wsj.com

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(END) Dow Jones Newswires

November 05, 2015 11:35 ET (16:35 GMT)

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