Lockheed Martin Corp. has agreed to pay a sum of nearly US$62 million for settling a case in which the company’s employees had accused the company of mismanagement of their 401(k) retirement plans, court papers that were made public on this Friday reveal.
In the case filed in the East St. Louis, Illinois, based federal court, the lawyers for the appealers spoke about the ruling that it is the largest ever settlement for a case that claimed such an excessive fees in a 401(k) litigation.
The lawsuit represented more than 108,000 plan participants from the company, court papers reveal.
The lawsuit had begun in the year 2006. It appealed that Lockheed Martin Corp. has hidden excessive sum of money that was imposed on the participants of the pension plan. This money also ultimately suppressed investment returns.
The papers also state that Lockheed had hidden how portfolio managers had invested too conservatively for its funds, making the fund underperform greatly amongst its peers and making it more difficult for the company employees in keeping up with inflation.
The settlement papers reveal that Lockheed would either directly make payments into the retirement plans of class members, or would issue checks even to those individuals who may have left the organization. The company also took steps to keep the fees down for the future, the papers state.
Lockheed Martin Corp. has denied any wrongdoing, but has stated that it decided to settle the matters to avoid further expenses and uncertainty that may arise from litigation, the papers state.
A trial was scheduled for December 2014 on the matter, but was cancelled so that both parties could resolve the case out of the court through mediation.