ST. LOUIS--(BUSINESS WIRE)--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 to come.”
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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