T. Rowe Price Gets Final Approval for $7 Million 401(k) Deal

A $7 million settlement between T. Rowe Price Group Inc. and a class of 18,000 participants in the company’s 401(k) plan received final approval in Maryland federal court, as did a $3.5 million fee award for the participants’ lawyers.

Chief Judge James K. Bredar of the US District Court for the District of Maryland on Wednesday approved the deal and awarded class counsel all their requested fees, along with more than $700,000 in expenses. In an earlier order, Bredar said he’d “have concerns” about the size of the fee request were it not for a separate $6.6 million payment T. Rowe Price made to more than 6,000 plan participants in 2019.

The deal provides all class members with minimum payments of $20 and additional money based on the size of their investments in the 39 T. Rowe Price funds challenged by the lawsuit, according to the plaintiffs’ settlement motion. The deal requires T. Rowe Price to add a brokerage window to the plan, which the motion says will “allow Plan participants, for the first time, to invest in a wide range of non-T. Rowe Price investment funds.”

In April, T. Rowe Price filed a letter with the court casting doubt on the propriety of the $3.5 million fee request in light of regulatory developments affecting cryptocurrency in 401(k) plans. T. Rowe Price argued the brokerage window included in the settlement could be jeopardized—potentially rendering the settlement less valuable—if the Labor Department more strictly regulated brokerage window investments including cryptocurrency.

The lawsuit accuses T. Rowe Price of profiting from its employee 401(k) plan by filling it almost exclusively with affiliated investment products that paid fees to the company.

The plan participants are represented by Cohen Milstein Sellers & Toll PLLC and McTigue Law LLP. T. Rowe Price is represented by O’Melveny & Myers LLP.

The case is Feinberg v. T. Rowe Price Grp., Inc., D. Md., No. 1:17-cv-00427, final approval order 7/6/22.