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Kraft Foods Agrees to $9.5 Million ERISA Plan Settlement

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Chicago, ILTwo ERISA lawsuits that made various allegations against the managers and administrators of a 401(k) plan maintained by Kraft Foods Global have resulted in a $9.5 million settlement. While the four individual plaintiffs will see individual awards, and legal teams involved will be awarded legal fees and court costs, it is unclear what the 81,000 members of the class will receive at the end of the day.

The cases are George et al. v. Kraft Foods Global Inc. et al., 1:08-cv-3799 and 1:07-cv-1713.

The class plaintiffs alleged that that the fiduciaries responsible for overseeing the retirement plan breached their duties under ERISA pension rules by allowing the employee savings plan to pay excessive investment management and other fees, and by maintaining excessive cash in the company stock investment funds.

Kraft disputed the allegations.

The ERISA plan settlement comes almost a year after the first mediated discussion took place in August 2011 before continuing in December, then January of this year under US Magistrate Judge Nan R. Nolan of the Northern Distinct of Illinois. Judge Nolan handed down final approval of the settlement on June 26.

According to the terms of the settlement, plaintiffs Gerald George, Cathy Dunn, Timothy Streff and Andrew Swanson will receive a $15,000 incentive award. Legal fees and court costs will eat up another $4.7 million. The remainder of the $9.5 million gross settlement fund, presumably, will be used to fund compensation for the remainder of the 81,000 participants in the class.

According to a report, the employee 401k participants will be awarded settlement cash based on a points system that considers the particular funds involved, and the number of years invested.

The class is defined as those who participated in the plan any time within the 11-year period between October 16, 2000 and February 23, 2012 including surviving spouses, designated beneficiaries or alternate payees.

In spite of assertions it had fully complied with regulations and good practices related to ERISA investment guidelines, the defendant agreed to comply with various Department of Labor initiatives and regulations.

The Employee Retirement Income Security Act of 1974 (ERISA) was designed to safeguard participants in ERISA benefits plans from potential mismanagement by those whose fiduciary duties are to maintain the plans in the absolute best interests of plan participants.

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READER COMMENTS

Posted by

on
I always thought that my plan had flaws, just like their
pension plan failing to provide an interest or dividends.
Why weren't ALL former employees notified of this class action? Should Fidelity have informed us?

Posted by

on
I had 17 years with this company and sent off the class action form. I have not receive any money.

Posted by

on
I'm a former employee. I submitted a claim form in March 2012 and haven't received any monies yet. Where is my money?

Posted by

on
I am a former employee of Kraft Foods, Woburn MA which was closed as part of company downsizing. I have a 401 k plan through kraft serviced by Fidelity, am going to benefit from this settlement

Posted by

on
Is this case closed or can i still recieve a settlement?

Posted by

on
wondering what is going on with this settlement?

Posted by

on
I spoke with Rebecca/Schlichter, Bogard& Denton, 12/30/2015. Rebecca was evasive, would not answer any of my questions and made the claim that this settlement was too old to find any records referencing the settlement. She claimed the settlement is closed and there is no recourse to find if anyone has received a payment or how much!

Posted by

on
i work for this company from 1990 till 2009 do i qualify for any payment from this lawsuit

Posted by

on
It is now 10/10/2015 I worked 22 years for this company and nothing surprises me haven't received any info or money, WHY NOT!!!!!!!!!!!!!!!!

Posted by

on
Where's my money?

Posted by

on
Still waiting on PAYMENT

Posted by

on
Has anyone ever recieved anything from this suit

Posted by

on
I have not received payment yet tried calling the information line and it says you should try you call again.

Posted by

on
I have received the notice from Kraft regarding payment as of 9/28/12, but have not received any payment or any further information from Kraft or lawyers as of 6/29/13. I am calling the settlement administrator, Rust Consulting at 1 888 334 6147 on Monday 7/1/13 and suggest that anyone else who has not received payment yet do the same.

Posted by

on
Has anyone received their payment yet? The letter we received said the settlement amount was distributed to the plan and allocated into individual participant accounts as of September 28, 2012 but we still have not received any such payment as of March 26, 2013.

Posted by

on
I have not heard anything yet either. How long should it take until we receive a payment or at least some kind of notification?

Posted by

on
So what happens now, what do the employees have to do next? We have not heard from Kraft or the lawyers since the settlement.

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