Philadelphia-based engineering company CDI Corp. will pay $1.8 million to settle a proposed class action challenging its 401(k) plan fees, federal court papers show.
The deal, filed Monday in the U.S. District Court for the Eastern District of Pennsylvania, is expected to benefit more than 4,100 people covered by the company’s $263 million retirement plan. It resolves allegations that CDI failed to implement a proper system for evaluating the plan’s investment options, causing the plan to offer expensive, actively managed funds and retail share classes in lieu of cheaper and better performing alternatives.
The settlement comes seven months after Judge Chad F. Kenney denied CDI’s partial motion to dismiss, which argued plaintiffs Adam Crawford and Lucia DePretto lacked standing to challenge the fees or performance of funds they didn’t personally hold in their 401(k) accounts. Kenney’s one-page order didn’t include a written explanation for his decision.
The case is one of more than 90 proposed class actions challenging retirement plan fees filed in 2020. A few defendants have signed early settlements, including health technology company Cerner Corp. ($4.05 million), global chemical distributor Brenntag North America Inc. ($2.3 million), technology services company Serco Inc. ($1.2 million), and defense contractor ManTech International Corp. ($1.2 million).
Crawford and DePretto are represented by Edelson Lechtzin LLP, which stands to receive up to $540,000 in attorneys’ fees if the deal is approved.
Morgan, Lewis & Bockius LLP represents CDI.
The case is Crawford v. CDI Corp., E.D. Pa., No. 2:20-cv-03317, motion for settlement approval 6/7/21.
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