Neuberger Berman’s 401(k) Settlement Spurs $4.8 Million Fee Bid

The lawyers who negotiated a $17 million class settlement in a case challenging Neuberger Berman Group’s 401(k) plan want a federal judge in Manhattan to award them about $4.8 million in attorneys’ fees and litigation expenses.

The fee request, which represents 28% of the settlement fund, is justified by the “outstanding result” achieved by class counsel and is lower than other fee awards approved in similar Employee Retirement Income Security Act class actions, the attorneys say in a new motion.

The fees are justified because the settlement produced an average gross recovery of more than $11,700 for the 1,451 class members, which the attorneys say is “46 times the average gross recovery for a proprietary funds class member and 3.75 times the next-highest known recovery in similar ERISA cases.”

The settlement resolves a lawsuit by participants in the Neuberger 401(k) plan who invested in the Value Equity Fund, an actively managed fund that paid fees to a Neuberger subsidiary. The participants claimed the fund, which has since been removed from the plan, performed poorly and charged excessive fees.

Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York granted preliminary approval to the deal in July. Swain initially dismissed the case’s central challenge in 2018 but reinstated the dismissed claim the following year.

Neuberger is among the dozens of financial companies that have been sued over the affiliated funds in their 401(k) plans.

Several have signed multimillion-dollar settlements, including McKinsey & Co. ($39.5 million), SunTrust Banks Inc. ($29 million), Fidelity Investments ($28.5 million), BB&T Corp. ($24 million), and Deutsche Bank ($21.9 million).

The motion for fees was filed Sept. 21.

The plan participants are represented by Bailey & Glasser LLP. The Neuberger committee is represented by Proskauer Rose LLP.

The case is Bekker v. Neuberger Berman Grp. 401(k) Plan Investment Comm., S.D.N.Y., No. 1:16-cv-06123, motion for attorneys’ fees 9/21/20.