International Paper Co. will pay $30 million to settle a lawsuit filed by its employees, who alleged that the paper distributor breached its fiduciary duty to its 401(k) plan participants.
The settlement was announced in a statement from Schlichter Bogard & Denton LLP, the law firm representing the slate of International Paper employees in the case filed in the U.S. District Court for the Southern District of Illinois.
The lawsuit began seven years ago on behalf of hourly and salaried workers at International Paper, with Pat Beesley of Beecher City, Ill. as the lead plaintiff. Plan participants claimed that as far back as 1997, the administrative fees for their retirement plans were “excessive,” according to the complaint.
Workers also alleged that the plans were handled differently from the company's pension plan and that International Paper had been “imprudent” in selecting funds for the 401(k).
Aside from the $30 million payment, International Paper will have to monitor its plans for four years, put out bids for its record keeping and take other steps to improve the services it provides to its workers and retirees.
“The case in question was filed seven years ago, and we are pleased to be able to put this behind us,” said Tom Ryan, a spokesman for International Paper. “Today's settlement agreement is not an admission of liability on the behalf of the company.”