March 24, 2016 – A Supreme Court ruling in the case set new standards of pleading for lawsuits against retirement plans that hold on to company stock. A federal district court has preliminarily approved a settlement in the case of Dudenhoeffer v. Fifth Third Bancorp.
The settlement agreement calls for $6 million to be placed into an account to be distributed to all class members in the case, minus certain fees.
In addition, the agreement calls for Fifth Third to make design changes to its retirement plan, including freezing the Fifth Third Stock Fund, so that no new money will be put into the fund. However, plan participants are allowed to transfer out of the fund if they wish. The recordkeeper of the plan will send an annual notice to participants that have more than 20% of their account invested in Fifth Third Stock Fund and educate them about the benefits of asset allocation and diversification.
According to the settlement agreement, Fifth Third currently funds plan contributions in the form of cash (not shares) and agrees not to change this for at least the next eight years. The Fifth Third Bancorp Pension, Profit Sharing, and Medical Plan Committee members will receive annual fiduciary training, and Fifth Third agrees to increase this training to be conducted at least twice annually.
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