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Robbing Peter to pay Paul is not a good idea on the streets and even a much worse idea for companies that manage employee retirement plans. Northrop Grumman discovered the legal costs of the retirement version of robbing Peter to pay Paul.
The Northrop Grumman class action settlement consolidates two class action lawsuits filed by several plaintiffs. Primary plaintiffs asserted they lost money saved in their retirement plans because Northrop Grumman violated several provisions of the federally enacted Employment Retirement Security Act (ERISA).
Plaintiffs of the Northrop Grumman class action settlement participated in one of two retirement plans: the Northrop Grumman Savings Plan, Plan 011, or the Northrop Grumman Financial Security and Savings Program, Plan 010.” According to class counsel, Northrop Grumman violated the legal rights of plaintiffs by handing out retirement plan assets as compensation for Northrop Grumman employees. Northrop Grumman designated the asset distributions as administration expenses that employees received for providing work-related services. The primary plaintiffs claim such distributions are not allowed under the provisions of ERISA.
The terms of the class action settlement require Northrop Grumman to set up a settlement fund of $16.75 million. Settlement funds go to eligible class members after the claims administrator accounts for court costs and attorney fees. Northrop Grumman continues to deny the allegations, but the company settled the consolidated class action lawsuit to avoid the uncertainty of a verdict.
What You Need To Know About the Northrop Grumman Retirement Plan Class Action Settlement
According to court documents, eligible class members include “all persons who participated in or were beneficiaries of the Northrop Grumman retirement plans between Sept. 28, 2000 and May 11, 2009.” Qualifying class members have until September 22, 2017 to dispute any of the provisions of the class action settlement. However, class members are not permitted to opt out of the agreement. The court must approve the Plan of Allocation that determines the financial award given to eligible class members.
The deadline to submit a valid claim form is October 13, 2017. Only former Northrop Grumman retirement plan participants need to submit a claim form. The judge presiding over the class action settlement for the case Northrop Grumman Corporation ERISA Litigation, Case No. 2:06-cv-06213-AB-JC, in the U.S. District Court for the Central District of California has scheduled the final hearing on October 23, 2017. Learn what transpired at the final hearing by visiting the class action settlement website www.Northrop401kSettlement.com. The class action settlement website also presents the list of attorneys who represent the class and defense counsels, as well as updates concerning the potential class member award. The class action settlement merges the class action lawsuits called Grabek, et al. v. Northrop Grumman Corporation, Case No. 06-CV-6213, and Heidecker, et al. v. Northrop Grumman Corporation, Case No. 07-CV-0153.