Costco ERISA Suit Ends in $5.1 Million Deal

A Wisconsin federal judge approved a $5.1 million settlement of a class action lawsuit against Costco concerning its 401(k) plan. Costco Wholesale Corp.’s retirement plan participants alleged that the company violated the Employee Retirement Income Security Act (ERISA). An independent fiduciary, Fiduciary Counselors, approved the settlement, which represents an amount that is about 16% of the allegedly excessive fees that Costco charged plan participants.

Dustin Soulek originally filed the suit in June 2020, claiming that Costco had violated ERISA by retaining imprudent high-cost investments over comparable lower-cost funds. Soulek also alleged in the suit that beginning in 2014, Costco charged participants unreasonably high recordkeeping and administration fees.

In September 2021, the U.S. District Court for the Eastern District of Wisconsin in Soulek v. Costco Wholesale Corporation et al., case number 1:20-cv-00937, stayed the proceedings due to the pending U.S. Supreme Court decision in Hughes v. Northwestern University. In January, the high Court vacated the Seventh Circuit’s decision upholding the dismissal of the Northwestern ERISA case, which addressed allegations similar to those in Soulek.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment 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 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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