Members of the class of participants in the Citigroup Inc. (“Citigroup”) 401(k) retirement plan are finalizing a $6.9 million settlement to conclude an Employee Retirement Income Security Act (“ERISA”) suit alleging the committees charged with managing the plan selected funds associated with Citigroup over less expensive options.
The settlement agreement comes almost 11 years after the suit was filed, and although Citigroup itself was removed as a defendant in the case in 2010, the Citigroup 401(k) Plan Investment Committee, the Benefit Plans Investment Committee of Citigroup Inc., and individual committee members and officers remain named defendants.
Class members accused defendants of failing to meet their fiduciary duty by putting the best interests of Citigroup ahead of those of the plan participants. Defendants allegedly “repeatedly fail[ed] to remove or replace investment products offered and managed by Citigroup subsidiaries and affiliates which had poor performance and high fees,” and, by maintaining the affiliated funds, allowed Citigroup to make a substantial profit at the expense of the plan participants.
The class, comprised of plan participants who invested in any of nine Citigroup-affiliated funds between October 18, 2001 and December 1, 2005, filed a letter motion on August 1, 2018 in the Southern District of New York requesting that U.S. District Judge Sidney H. Stein grant the parties an additional two weeks to advance the settlement’s motion for preliminary approval. The parties have already agreed upon the terms of the settlement and executed an agreement, but need the additional time to resolve issues surrounding historical class member transactional data.
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Powell, Christine. “Citigroup 401(k) Plan Participants Poised For $6.9M Deal.” Law 360. Last modified on August 2, 2018.