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.
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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.