Food and nutrition company Kerry Inc. will pay $900,000 to settle a proposed class action claiming the 401(k) plan covering its employees is plagued by excessive fees for recordkeeping and managed account services, workers told a Wisconsin federal court Monday.
The settlement, which is expected to cover about 5,000 people, represents about 15% of the workers’ total estimated losses associated with the 401(k) plan’s fees. It was negotiated after a full-day session with a neutral mediator in September, according to the filing.
Kerry is accused of breaching its fiduciary duties under the Employee Retirement Income Security Act by allowing its 401(k) plan to overpay for administrative services, including record keeping and managed account services. Plaintiff Joshua Walter says the plan’s annual record keeping fees averaged about $128 per person, when a reasonable annual fee would have been closer to $49 per person.
Judge Brett H. Ludwig allowed the case to advance past Kerry’s motion to dismiss in May, noting that the US Court of Appeals for the Seventh Circuit’s 2020 decision in Divane v. Northwestern University—which affirmed the dismissal of a similar ERISA lawsuit—was no longer good law after it was vacated and remanded by the US Supreme Court in January.
The deal comes two months after the Seventh Circuit’s most recent pronouncement on 401(k) plan fees. The...
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