Benefits & Executive Compensation News

American Airlines Inks $22M Deal in 401(k) Funds Challenge

July 10, 2017, 2:39 PM

American Airlines Inc. agreed to a $22 million settlement in a lawsuit claiming it drained its employees’ retirement savings by filling its 401(k) plan with expensive funds that earned fees for an affiliated entity (Main v. Am. Airlines, Inc., N.D. Tex., No. 4:16-cv-00473-O, motion for preliminary settlement approval filed 7/7/17).

The proposed class action targeted the American Beacon funds in the airline’s 401(k) plan, which participants said were overly expensive and “complete failures in the marketplace.” These funds earned fees for the airline’s corporate family and caused the plan to lose tens of millions of dollars in excessive...

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