BlackRock Signs Nearly 8-Figure Deal to End ERISA Class Action Claim

Following almost four years of litigation, a $9.65 million settlement has been reached in a complex ERISA class action brought by investors in the BlackRock Retirement Savings Plan that included allegations of self-dealing and excessive fees. 

Plaintiffs Charles Baird and Lauren Slayton sought to certify two classes, including one class of BlackRock employees that participated in the company’s collective trust investment funds and another class that participated in BlackRock’s 401(k) plan, known as the BlackRock Retirement Savings Plan. A California federal judge declined to certify the first class in February 2020, but did certify the second class, which reached the settlement agreement following a February 2021 settlement conference.

Defendants in the class action included BlackRock, its board members and subsidiaries, and Mercer Investment Counseling, the plan’s investment consultant. According to the complaint, the plaintiffs alleged that BlackRock’s retirement plan used an excessive amount of its own investment products and “selected and retained high-cost and poor-performing investment options, with excessive layers of hidden fees that are not included in the fund expense ratios” in the 401(k) plan.

Under the settlement, approximately 17,000 participants in the BlackRock Retirement Savings Plan from April 2011 through the settlement approval date will share in the cash payment of $9.65 million, which will provide investors with almost one-third of their potential damages. 

In the settlement filing, BlackRock stated that, “the plan has been managed, operated, and administered at all relevant times in compliance with ERISA and applicable laws and regulations. This settlement agreement and the prior negotiations between the parties, shall in no event constitute, be construed as, or be deemed evidence of, an admission or concession of any wrongdoing, fault or liability of any kind by defendants.”

The settlement also calls for the appointment of an independent fiduciary to oversee the settlement process and caps attorneys’ fees on the gross settlement amount at 29%.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment legal compliance needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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