Schlichter, Bogard & Denton Granted Final Approval of $35 Million Settlement for Cigna Employees and Retirees Over Disputes in the Handling of the Cigna 401(k) Plan
Schlichter, Bogard & Denton, a St. Louis law firm, achieved final approval of its $35 million settlement on behalf of Cigna employees and retirees with Cigna Corporation and Prudential Retirement Insurance and Annuity Company (PRIAC) of Nolte, et al. v. Cigna Corp., et al. Case No. 07-02046 in the U.S. Federal Court for the Central District of Illinois. The case involves disputes over the handling of the Cigna 401(k) plan, the prudence and level of fees of certain plan investment options, and the sale of Cigna’s retirement business to PRIAC.
The settlement is the largest ever for a case of its kind on behalf of 401(k) plan investors.
Payments to class members — who were previously notified of the settlement — are expected to begin before the end of the year. Jerome Schlichter of Schlichter, Bogard & Denton, attorneys for the Cigna 401(k) employees and retirees, stated “This has been a long battle for almost seven years. In addition to the money, all Cigna employees and retirees in the 401(k) plan will benefit for many years in the future with a greatly improved 401(k) plan, enabling them to build a meaningful retirement for the future.” The case began February 26, 2007, when the plaintiffs filed their initial complaint.
The employees and retirees alleged, among other things, that the fiduciaries responsible for overseeing the plan breached their legal duties by allowing the plan to pay excessive investment management and other fees while allegedly benefiting Cigna and that Cigna improperly benefitted from the sale of Cigna’s retirement business.
As part of the settlement, Cigna has agreed to a variety of initiatives designed to enhance its review of alternatives for the Plan and Plan Participants’ retirement savings. Additionally, Cigna has agreed to continue not to include in the Plan’s investment lineup any investment options managed by it or its affiliates, and has agreed to continue to exclude retail class mutual funds from the Plan’s lineup. Cigna will engage independent consultants to evaluate and make recommendations regarding certain aspects of the Plan’s administration.
The Cigna case was one of a number of cases filed by Schlichter, Bogard & Denton, which launched the field of 401(k) fiduciary breach litigation for excessive fees. After years of litigation, Schlichter, Bogard, & Denton recently won a $50 million judgment from ABB and Fidelity in a case on behalf of ABB employees and retirees in ABB’s 401(k) plan, after the first full trial of a 401(k) excessive fee claim in the country. Tussey v. ABB, Inc., Case No. 06-4305 (W.D. Mo.) The firm has also settled other cases on behalf of participants in the 401(k) plans of Caterpillar, General Dynamics, Kraft Foods, International Paper and Bechtel totaling over $120 million. Martin v. Caterpillar, Inc., Case No. 07-1009 (C.D.Ill.); Will v. General Dynamics Corp., Case No. 06-698 (S.D.Ill.); Kanawi v. Bechtel Corp., Case No. 06-5566 (N.D.Ca.); George v. Kraft Foods Global, Inc., Case Nos. 07-1713 & 08-3799 (N.D.Ill.); Beesley v. International Paper, 06-703 (S.D.Ill.).
About Schlichter, Bogard & Denton, LLP
Schlichter, Bogard & Denton, LLP is a national law firm that represents individuals, including 401(k) plan investors, whose plans suffer from excessive fees or imprudent investment options. Its attorneys are dedicated to helping employees and retirees secure the retirement benefits they deserve. Anyone who has questions about the fees and investments in a 401(k) or 403(b) plan can contact Schlichter, Bogard & Denton, LLP toll-free at (800) 873-5297.
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