Walgreen Co. is settling a lawsuit over its 401(k) plan for more than $13 million, recently filed court records show.
The company, which was sued in 2019, allegedly failed in its fiduciary duty by opting to keep the Northern Trust Focus Target Date Retirement Trusts on the plan menu. Use of those funds cost participants $300 million in savings that they could have realized if a more prudent investment option had been chosen between 2014 and 2019, according to the lawsuit. However, an expert hired by the plaintiffs later calculated potential damages as $34 million, based on a comparison to other target-date investments tracked by Morningstar.
According to a notice to the court filed last Friday, the plan no longer includes the Northern Trust target dates. Court records do not show which investment options are now used in place of those trusts, and the plan's most recent disclosures with the Department of Labor list the Northern Trust products in the plan.
As part of the settlement agreement, the plan will use an investment adviser to monitor the investment options for three years.
The parties agreed to mediation in 2020, though they failed to reach an agreement at the time. The proposed settlement, which requires court approval, came after a fresh round of negotiations.
The Walgreen Profit-Sharing Retirement Trust represented nearly $12.8 billion in assets as of 2020, data from the Department of Labor show.
As much as a third of the settlement, or nearly $4.6 million, will go toward attorneys’ fees, according to the proposal submitted to the court.
Law firms Sanford Heisler Sharp and Barnow and Associates represent the plaintiffs.
Law firm Capozzi Adler’s latest target for 401(k) fee litigation is accounting giant KPMG.
On Tuesday, the litigator filed a proposed class-action case in U.S. District Court in the District of New Jersey, alleging that KPMG failed participants by selecting excessively expensive investment options and overpaying for administrative services.
Similar to numerous other complaints filed by the law firm, the complaint singles out fund fees and record-keeping costs paid by participants.
The roughly $6 billion plan included mutual funds with higher expense ratios than those used in some comparably sized 401(k)s, according to the plaintiffs. The share classes of the funds on the plan menu were also in some cases not the lowest-fee versions available.
Between 2015 and 2019, per-participant record-keeping fees ranged from $85 to $98, while rates paid by participants at comparably sized plans could be anywhere from $21 to $34, according to the complaint.
KPMG did not respond to a request for comment.
A day before the lawsuit was filed, company CEO Paul Knopp announced changes to its employee benefits, including new perks for 401(k) participants. KPMG is planning to replace the current 401(k) and pension plan match structure with “a single, automatic firm-funded contribution within the 401(k) plan equal to 6% to 8% of eligible W-2 pay,” Knopp said in a LinkedIn post. “The new plan will feature market-leading flexibility as all employees will receive the contribution without any requirement to contribute their own money.”
The leadership changes coming in June, which also include wealth management and digital unit heads, come as the firm pushes to offer more comprehensive services.
Strategist sees relatively little risk of the university losing its tax-exempt status, which could pose opportunity for investors with a "longer time horizon."
As the next generation of investors take their turn, advisors have to strike a fine balance between embracing new technology and building human connections.
IFG works with 550 producing advisors and generates about $325 million in annual revenue, said Dave Fischer, the company's co-founder and chief marketing officer.
Five new RIAs are joining the industry coalition promoting firm-level impact across workforce, client, community and environmental goals.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
