Northrop Grumman 401(k) Forfeitures Drive Would-be Class Suit

Northrop Grumman Corp. was hit with a proposed class action challenging how the aerospace and defense company handles the retirement savings forfeited by departing workers.

Northrop uses 401(k) forfeitures to reduce the employer contributions it’s required to make to the plan, instead of using them to reduce the administrative expenses charged to workers, two plan participants said in a complaint filed Tuesday in the US District Court for the Eastern District of Virginia. This practice allowed Northrop to save more than $90 million between 2018 and 2023, according to the complaint.

The participants, who seek to represent a class of ...