A suit that had alleged a “radical redesign” of a plan’s investment menu with new and untested funds to favor a plan’s consultant has been settled, according to the parties involved.
This suit was filed in mid-2018 by plaintiffs Jeffrey McGinnes, Wendy Berry, Lorri Hulings, and Kathleen Sammons, individually and on behalf of the FirstGroup America, Inc. Retirement Savings Plan, and its 13,000 participants. The suit claimed that the defendants “…breached their fiduciary duties under ERISA by engaging in a radical redesign of the Plan’s investment menu that was designed to benefit Hewitt (the Plan’s fiduciary investment consultant) rather than the participants and beneficiaries of the Plan, and have stubbornly adhered to this imprudent menu design in spite of evidence that it has caused significant and ongoing damage to the Plan.”
The plaintiffs here (Berry et al. v. FirstGroup America Inc. et al., case number 1:18-cv-00326, in the U.S. District Court for the Southern District of Ohio)—and Defendant Aon Hewitt Investment Consulting, Inc.—filed a motion for the court to “vacate the dispositive motion briefing schedule with respect to Plaintiffs’ claims against Aon Hewitt and set the following deadline for Plaintiffs to file their Unopposed Motion for Preliminary Approval of the Settlement Agreement: seven (7) days following the Settling Parties’ receipt of plan participant data from the Plan’s recordkeepers.”
Why participant data? Well, the parties here explain that the participant data “is necessary for the Settling Parties to comply with the Class Action Fairness Act”—which requires that within 10 days after a proposed settlement of a class action is filed in court, each settling defendant must serve a notice of proposed settlement upon the appropriate state official of each state in which a class member resides and the appropriate federal official.”
The filing goes on to note that that notice must include “the names of class members who reside in each State and the estimated proportionate share of the claims of such members to the entire settlement to that State’s appropriate State official,” or, if such information is not feasible, “a reasonable estimate of the number of class members residing in each State and the estimated proportionate share of the claims of such members to the entire settlement.”
The motion concludes that since the defendants aren’t opposing the settlement, and given that the Settling Parties’ Settlement Agreement has been finalized and executed, that Plaintiffs are prepared to move for preliminary approval of the settlement agreement, and that the Settling Parties are working with third parties to obtain necessary plan participant data to comply with CAFA.