- Friday, 22 October 2010 17:30
Bechtel Employees Win ERISA Settlement
By Sarah Pierce
Â(LEGAFI)Â --Â Current and former employees of Bechtel Corp. have won an $18.5 million class action settlement from a lawsuit accusing the construction and engineering giant of violating the Employee Retirement Income Security Act (ERISA) by charging excessive fees on their retirement plans. More than 17,000 employees will share in the Bechtel settlement.
The Bechtel ERISA lawsuit, styled Beverly Kanawi et al. v. Bechtel Corp. et al., was originally filed in September 2006 and was certified as a class action two years later inOctober 2008. The class action lawsuit accused Bechtel and Fremont Investors, Inc., the companyâ€™s retirement plan administrator, of offering ill-advised investment options, subjecting the companyâ€™s benefits plan to unreasonable fees and expenses, and engaging in self-dealing, among other unlawful practices. Fremont's selection as Bechtelâ€™s plan administrator was not in the best interest of the benefits plan participants, the lawsuit said, because Fremontâ€™s founders were former Bechtel employees.
The Bechtel class action lawsuit sought a judgment to make Bechtel and Fremont â€œpersonably liableâ€ to make good for all losses incurred by the plan as a result of the alleged unlawful conduct. The settlement also included an agreement by Bechtel to hold off on investing any retirement plan money in retail mutual funds for 36 months after the settlement is approved. Bechtel also agreed under the class action settlement to not use an investment advisor in which the company holds more than a 2-percent stake in the retirement plan.
The Bechtel class action settlement class includes all current and former Bechtel employees who held an account with a positive balance in the Bechtel Trust and Thrift Plan or the Becon Trust and Thrift Plan between January 1, 1992 and September 30, 2010.