Workers’ Attorneys Receive $1Million Share of $4M Koch ERISA Settlement

February 4, 2022
Hall Benefits Law, LLC

A putative class of roughly 101,000 participants in multiple retirement plans for Koch employees, reached a $4 million settlement with Koch Industries Inc., Koch Business Solutions LP, and the Koch Benefits Administrative Committee (“Koch”), in July 2021.Almost six months later, in December 2021,  federal judge in Georgia approved a $1 million award of attorney’s fees to lawyers from the law firms of Nichols Kaster PLLP and the Sanford Law Firm in Kinder et al. v. Koch Industries Inc. (1:20-cv-02973) (N.D. Ga.).

These attorneys helped the class of Koch workers gain a $4 million settlement after alleging that Koch Industries Inc. subjected their retirement plan to excessive record-keeping costs in violation of the Employee Retirement Income Security Act of 1974, as amended (ERISA).

Last July, attorneys for the class announced that they had requested attorneys’ fees of 25% of the proposed settlement amount, lower than the customary 33% awarded in similar ERISA class actions. The court also approved $209,532 in administrative expenses and almost $18,000 in litigation expenses. 

Plan participants sued Koch in July 2020, alleging that the company stood by passively as its retirement plans paid up to six times the record-keeping fees for similar-sized plans, despite the ability to negotiate lower rates. The plaintiffs claimed that these record-keeping costs ranged from $53 to $146 per participant between 2014 and 2018. The plaintiffs’ investigation revealed that a “prudent and loyal fiduciary” could have procured similar services for as low as $14 per participant during the same five-year period.

Lead plaintiffs David Kinder and Tracy Scott argued that Koch paid exorbitant fees even though the Koch Companies Defined Contribution Master Trust had “significant leverage to negotiate record-keeping expenses.” This master trust governs several retirement plans for Koch employees, including Kinder and Scott’s Georgia-Pacific Hourly Plan.

Plan participants also claimed that Koch either failed to monitor these fees properly or accepted them, although excessive, in exchange for discounts on other services provided by the record-keeping entity.

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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