SunTrust Banks Inc. has agreed to pay $29 million to settle an ERISA class action accusing the company of profiting at its workers’ expense by letting them sink their 401(k) investments into poorly performing, affiliated funds.
The former workers leading the Employee Retirement Income Security Act case urged U.S. District Judge Orinda D. Evans to greenlight the agreement on Wednesday, saying the deal was “fair, reasonable, and adequate and free from fraud or collusion.”
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The workers' motion noted that the litigation has been “unusually hard-fought,” beginning with an administrative claim filed with plan fiduciaries in 2008 and involving three lawsuits filed by different groups of plaintiffs that were eventually consolidated.
According to their amended complaint, SunTrust favored affiliated investments for its 401(k) plan that RidgeWorth Capital Management Inc., then a subsidiary, was able to collect fees from. And the company’s benefits plan committee prioritized SunTrust’s interests over the plan’s participants when monitoring the plan’s line-up, the workers claimed.
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The workers are represented by James A. Moore and J. Brian McTigue of McTigue Law LLP; Karen L. Handorf, Scott Michael Lempert and Jamie L. Bowers of Cohen Milstein Sellers & Toll PLLC; and Alan R. Perry Jr. of Page Perry.
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