Koch Industries Inc. will pay $4 million and look for a new retirement plan record keeper as part of a class action settlement in a lawsuit challenging the plans’ administrative fees, papers filed in the Northern District of Georgia show.
The deal is expected to benefit about 101,000 people who were covered by three retirement plans affiliated with Koch Industries. In addition to the monetary payment, the company agreed to put the plan’s record-keeping services up for competitive bidding within 180 days of the settlement’s effective date, according to paperwork filed Monday in the U.S. District Court for the Northern District of Georgia.
The lawsuit claims Koch’s plans—which together held more than $8 billion during the period in question—charged excessive administrative fees that were out of line with the broader retirement industry. The plan participants sought to hold Koch and its benefits committee liable for violations of the Employee Retirement Income Security Act.
Koch moved to dismiss the lawsuit last fall, arguing that case law from the U.S. Court of Appeals for the Eleventh Circuit requires participants to exhaust the plans’ internal appeals procedures before pressing these claims in court. Judge Mark H. Cohen hasn’t ruled on the motion.
The case is one of more than 90 proposed class actions challenging retirement plan fees filed in 2020. A few defendants have signed early settlements, including health technology company Cerner Corp. ($4.05 million), global chemical distributor Brenntag North America Inc. ($2.3 million), Philadelphia-based engineering company CDI Corp. ($1.8 million), technology services company Serco Inc. ($1.2 million), and defense contractor ManTech International Corp. ($1.2 million).
The Koch plan participants are represented by Nichols Kaster PLLP, Austin & Sparks PC, and Sanford Law Firm PLLC, which stand to receive $1 million in attorneys’ fees if the deal is approved.
Koch is represented by Jones Day.
The case is Kinder v. Koch Indus., Inc., N.D. Ga., No. 1:20-cv-02973, settlement approval motion 7/12/21.