Boeing Settles Retirement-Plan Class Action
August 26 2015 - 5:40PM
Dow Jones News
Boeing Co. agreed Wednesday to a preliminary deal to settle a
long-running lawsuit accusing the company of mishandling its 401(k)
plan to the detriment of its employees.
The terms of the settlement, which comes on the day a trial was
scheduled to begin in the nine-year-old class-action suit, couldn't
immediately be determined. The two sides are expected to update the
court on details of the talks next month, according to a court
order.
Filed on behalf of 190,00 Boeing employees and retirees, the
suit accused Boeing of failing 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 401(k) practices and denied the
claims, had no comment Wednesday on the settlement. A
representative for the plaintiffs had no immediate comment
Wednesday.
U.S. District Judge Nancy Rosenstengel in East St. Louis, Ill.,
who was to preside over the case, had ordered the two sides to make
one more effort at mediation before proceeding to trial.
The settlement is the ninth reached in a string of similar
lawsuits brought against companies for alleged violations of the
federal Employee Retirement Income Security Act by plaintiffs'
lawyer Jerome Schlichter.
Earlier this year, Mr. Schlichter helped negotiate a $62 million
settlement with Lockheed Martin Corp. and a $27.5 million deal with
Ameriprise Financial Inc. Mr. Schlichter's law firm typically takes
home 30% of the recoveries.
Boeing's $44 billion 401(k) plan is the second largest in the
nation after International Business Machines Corp.'s, according to
the Labor Department.
Write to Sara Randazzo at sara.randazzo@wsj.com
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(END) Dow Jones Newswires
August 26, 2015 17:25 ET (21:25 GMT)
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