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Abbott vs. Lockheed Update

A $62 million settlement is pending in this case, inclusive of non-monetary provisions to assure compliance with the settlement itself and enhancements to the Lockheed 401(k) Plan for both the plan sponsor and participants. In following, Lockheed must receive at least three competitive bids for its plan from recordkeepers that serve 401(k)s with assets greater than $5 billion, in addition to monthly reporting and metrics requirements.

More than 100,000 plaintiffs alleged that Lockheed Martin breached its fiduciary duties under ERISA by imprudently investing participants’ 401(k) Plan savings in funds that charged excessively high fees, therefore diminishing returns. The plaintiffs also claimed that Lockheed Martin permitted an unreasonably high percentage of participant assets be invested in low yielding money market funds of State Street Bank & Trust, with which Lockheed had several other
business relationships.

planadviser, February 20, 2015.