A class of Deutsche Bank (“Deutsche” or the “Bank”) employees has announced a $21.9 million settlement to resolve ERISA claims that Deutsche funneled their retirement savings into expensive and underperforming proprietary funds.
The operative complaint accuses Deutsche of violating its ERISA fiduciary duties and placing its own interests ahead of those of its employees by steering its employees’ retirement savings into proprietary funds with excessive fees. According to the settlement, filed in the U.S. District Court for the Southern District of New York on August 14, 2018, Deutsche consented to give all decision-making power regarding its proprietary investments to an independent fiduciary. The Bank also plans to work with the fiduciary to potentially replace existing mutual funds in the plan with other investment options.
The class is comprised of 34,700 Deutsche employees and the average recovery is approximately $631.12, a favorable outcome compared to recent settlements of similar cases. The $21.9 million settlement accounts for more than 50 percent of the damages caused by the proprietary funds, as calculated by an average of the plaintiffs’ expert’s two projection models, and approximately 38 percent of all investment damages.
The settlement agreement applies to “all participants and beneficiaries of the Deutsche Bank Matched Savings Plan at any time during the class period from Dec. 21, 2009, through Aug. 14, 2018, whose individual accounts were invested in the disputed investments,” excluding any defendants or their employees with responsibility for the plan, as stated in the settlement documents.
Prior to settlement being reached, Judge Lorna G. Schofield had partially granted, and partially denied, Deutsche’s motion for summary judgment in June 2018, and the trial on the remaining claims had been scheduled for later in the summer.
The legal team at Shepherd, Finkelman, Miller & Shah, LLP (“SFMS”) has significant experience litigating ERISA and class action matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier or Chiharu Sekino. We can also be reached toll-free at 866-540-5505.
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Petrick, John. “Deutsche Bank To Pay $22M To Settle Workers’ ERISA Suit.” Law 360. Last modified on August 15, 2018.