PPL Corporation has agreed to pay $8.2 million to settle a class action lawsuit claiming the company mismanaged employee retirement funds. The lawsuit was filed in January 2022 by current and former employees of PPL and its subsidiaries, LG&E and KU Energy LLC. The plaintiffs claimed that PPL kept underperforming target date funds from Northern Trust Corporation in its retirement portfolio for several years.
These funds allegedly lagged behind alternatives in returns by 4% to 17% between 2015 and 2017, resulting in collective losses of $37 million to $55 million for plan participants. The funds were eventually removed from the retirement plans in 2020. According to court filings, a preliminary settlement was reached last week.
If finalized, all workers who participated in the impacted plan from January 12, 2016, through June 30, 2020, will be entitled to a portion of the $8.2 million payout, which will be placed in a gross settlement fund. PPL Corporation released a statement regarding the agreement: “At PPL, we are committed to providing our employees competitive retirement benefits to help them plan for retirement.
Retirement fund mismanagement settlement reached
This includes a range of 401(k) investment options. We are fully confident in our plans’ design and processes and maintain there is no merit to the plaintiff’s allegations. However, we agreed to settle the case to avoid the time and expense of a trial.”
The settlement will cover administrative expenses, $20,000 service awards for each of the six named plaintiffs, and attorneys’ fees and costs.
Schlichter Bogard LLP represents the current and former participants involved in the lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania. U.S. District Judge Mia Roberts Perez presided over the case and noted that the plaintiffs’ claims were limited to breaches from January 12, 2016. PPL argued that the plaintiffs had failed to create a “meaningful benchmark,” but Judge Perez sided with the plaintiffs.
The parties reached the settlement agreement on January 14, signed on February 28. The plaintiffs have requested that the court schedule a final fairness hearing to receive evidence, argument, and any objections to the settlement agreement. The hearing is requested to be held no later than June 27, and following the hearing, the court must grant final approval of the settlement.
Image Credits: Photo by Saúl Bucio on Unsplash
