Judge Gregory H. Woods of the U.S. District Court for the Southern District of New York signed off on the deal in an order docketed Thursday. He awarded class counsel Nichols Kaster PLLP 20% of the settlement fund as attorneys’ fees, along with $133,979 in expenses and a $15,000 service award for class representative Tushar Bhatia.
The lawsuit claims McKinsey’s retirement plans—which together hold more than $6 billion in assets—are two of the most expensive large defined contribution plans in the country. The plans carry high fees that benefit McKinsey’s in-house investment manager, MIO Partners Inc., which earns between $20 million and $36 million each year from the plans, the lawsuit alleges.
Many companies that put their own financial products in their employees’ 401(k) plans have faced class lawsuits under the Employee Retirement Income Security Act by employees who say the investments charge high fees that benefit the company at their expense. Some have signed multimillion-dollar settlements, including Reliance Trust Co. ($39.8 million), SunTrust Banks Inc. ($29 million), Fidelity Investments ($28.5 million), BB&T Corp. ($24 million), and Deutsche Bank ($21.9 million).
McKinsey is represented by Morgan, Lewis & Bockius LLP.
The case is Bhatia v. McKinsey & Co., S.D.N.Y., No. 1:19-cv-01466, order approving attorneys’ fees docketed 2/18/21.