Settlement includes non-monetary relief for participants, with key
After over three years of litigation, on November 30, 2018, participants
in the BB&T Bank 401(k) plan filed a motion for preliminary settlement
approval with the U.S. District Court for the Middle District of North
Carolina. Settlement terms include the creation of a $24 million
settlement fund for the plaintiffs, as well as non-monetary relief.
In the case, Robert Sims, et al v. BB&T Corporation, et al.,
employees and retirees of BB&T, who were represented by law firms
Schlichter Bogard & Denton LLP, Nichols Kaster, PLLP and Puryear &
Lingle, PLLC, sued for alleged breach of fiduciary duty under the
Employee Retirement Income Security Act (ERISA).
“We are pleased to have achieved this important settlement for the
employees and retirees of BB&T and look forward to receiving the court’s
approval,” said Jerry Schlichter, managing partner of Schlichter Bogard
& Denton, attorneys for the plaintiffs. “In addition to the financial
terms, this settlement includes significant non-monetary improvements to
the plan going forward, which will benefit plan participants for years
As a part of the settlement, BB&T agreed to, among other reforms, engage
a consulting firm to conduct a request for proposal for investment
consulting firms that are unaffiliated with BB&T and an independent
consultant to provide consulting services to the plan; BB&T will also
conduct a request for proposal for recordkeeping services. Going
forward, during the two-year period following final approval of the
settlement BB&T will rebate to plan participants any 12b-1 fees, sub-ta
fees, or other monetary compensation that any mutual fund company pays
or extends to the plan’s recordkeeper based on the plan’s
investments. In the settlement, BB&T admitted no wrongdoing or liability.
In the initial complaint, filed on September 4, 2015 in the Court of
Judge Catherine C. Eagles, plaintiffs claimed that BB&T selected and
retained in the plan high cost and poor performing investments, incurred
unreasonable administrative expenses, engaged in prohibited transactions
with both fiduciaries and parties in interest, and failed to monitor and
remedy the breaches of other plan fiduciaries.
Schlichter Bogard & Denton, based in St. Louis, MO, pioneered excessive
fee 401(k) and 403(b) litigation on behalf of employees and retirees.
Since 2006, the firm has filed over 30 such complaints and secured 14
settlements on behalf of employees. In 2009, the firm won the first full
trial of a 401(k) excessive fee case against ABB. The firm’s Tibble
v. Edison is the first and only 401(k) excessive fee case to be
argued in the Supreme Court. On May 18, 2015, the firm won a landmark
unanimous 9-0 decision in which both the AARP and the Solicitor General
wrote supporting briefs for the employees.
Jerry Schlichter and his firm have been referred to by federal judges as
“preeminent” in the field of 401(k) fee litigation; as demonstrating
“extraordinary skill and determination”; as making “a significant,
national contribution,” having “educated plan administrators, the
Department of Labor, [and] the courts” about fees and fiduciary
obligations; and has been referred to by federal judges as a “private
attorney general,” causing fees to come down by over $2 billion annually
in the entire 401(k) industry.
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