DeMoulas Inks $17.5 Million Deal in Low-Yield 401(k) Challenge

DeMoulas Super Markets Inc., which operates New England grocery chain Market Basket, will pay $17.5 million to settle a proposed class action claiming it forced employees to invest retirement savings in a fixed-income fund that earned minuscule returns and provided little opportunity for growth, the parties told a Massachusetts federal judge.

The deal, announced Nov. 20 in the U.S. District Court for the District of Massachusetts, also requires DeMoulas to limit the amount of plan assets held in cash or cash equivalents to 10% or less and modify the plan’s investment policy statement to increase the annual return target.

The ...