Settlement Reached in Principle in Pentegra Fiduciary Breach Case
According to a court filing, the parties agreed to a settlement in the second part of a case over prohibited transactions.
The parties in an ERISA fiduciary breach lawsuit involving Pentegra’s multiple employer retirement plan have reached a settlement in principle, according to a court order filed May 2 in U.S. District Court for the Southern District of New York.
The case, Khan et al. v. Board of Directors of Pentegra Defined Contribution Plan et al., was set to continue with court proceedings before a judge to resolve prohibited transaction claims. In a separate part of the case, a jury last week awarded more than $38 million to a class of plan participants alleging fiduciary breaches under the Employee Retirement Income Security Act of 1974.
In his order, U.S. District Judge Philip M. Halpern wrote that “all remaining deadlines in this matter are stayed while the parties formalize the terms of the formal class action settlement.”
The parties must either move for preliminary approval of the settlement or file a joint status update by May 16.
The lawsuit, filed in 2020, accused fiduciaries of the $2 billion Pentegra Multiple Employer Defined Contribution Plan for Financial Institutions of causing the plan to pay excessive recordkeeping and administrative fees to Pentegra Services Inc. A federal jury on April 30 found the plan’s board, former CEO John E. Pinto and Pentegra Services Inc. liable for breaching their fiduciary duties under ERISA and awarded $38.8 million in damages.
The plaintiffs are represented by Schlichter Bogard LLC, and Pentegra is represented by Groom Law Group.