Boeing Co. settled a lawsuit over claims that fees and expenses paid by a 401(k) retirement plan were illegal, averting a trial that was scheduled to begin Wednesday.
Workers alleged the fees of Boeing’s retirement plan violated the Employee Retirement Income Security Act, which sets minimum protections for such plans. The 2006 lawsuit, scheduled to be tried before U.S. District Judge Nancy Rosenstengel in East St. Louis, Illinois, was granted class-action status in 2013 on behalf of as many as 170,000 employees, according to Schlichter Bogard & Denton, the law firm for the plaintiffs.
John Dern, a Boeing spokesman, said terms of the provisional agreement are confidential. Leading up to trial, Boeing said in a statement that it contested the plaintiffs’ claims and would show at trial that its retirement investment options and fees were “carefully monitored, prudent and in line with the best practices in the 401(k) industry.”
Jerome Schlichter, a lawyer representing the employees, didn’t immediately respond after regular business hours to phone and e-mail messages seeking comment on the settlement.
Last year, Boeing announced it was freezing pensions for 68,000 nonunion employees and executives, shifting benefit payments to a 401(k)-style plan as it sought to cut costs. The Chicago-based company said the change was scheduled to take effect Jan. 1, 2016.
Boeing’s 401(k) was second in Bloomberg’s ranking of the plans offered by the top 50 companies in the Standard & Poor’s 500 Index.
The case is Spano v. The Boeing Company, 06-cv-00743, U.S. District Court, Southern District of Illinois (East St. Louis).