The Schlichter law firm strikes again in a $35 million settlement involving Cigna. Participants in Cigna’s own 401(k) plan filed suit against both the company and Prudential, which bought Cigna’s retirement business in 2004 for more than $2 billion. Cigna’s own plan was the largest plan in the book.
The allegations included:
• The plan was not managed for the exclusive benefit of the participants
• Unreasonable fees
• Using proprietary funds, especially the SVF that held $1 billion
• No competitive bidding
• Gentlemen’s agreement between the two companies not to move the Cigna plan for 3 years
The lawsuit was settled as a class action and the fee was by far the largest of any related settlement, though just smaller than the ABB case, also brought by Schlichter. The law firm’s fees: $11,666,667, plus $1.2 million in costs.
