A recent Law 360 story by Kevin Stawicki, “Attys Seek $7.8M for $24M Deal in Anthem 401(k) Suit,” reports that attorneys for a group of employees who sued an Anthem Inc. subsidiary over its multibillion-dollar 401(k) plan's fees and investments asked an Indiana federal judge to award them $7.8 million in fees after they reached a $24 million settlement.  Attorneys at Schlichter Bogard & Denton LLP, who serve as class counsel for the participants, argued that because the market rate for their services is the contingent fee, payment totaling one-third of the recovery is required.  The $7.8 million award is reasonable because the firm took on the significant risk of not getting paid and “literally created” 401(k) plan excessive fee litigation, the attorneys said.

“Among the indicia of the riskiness of this case is the very fact that class counsel not only created the field but has been virtually alone until recently in their willingness to handle and invest massive resources in ERISA 401(k) fee cases of this scope,” the firm said in the memorandum.  U.S. District Judge Tanya Walton Pratt granted preliminary approval to the $23.7 million deal in April, saying the agreement is a fair resolution to the Employee Retirement Income Security Act class action against ATH Holding Co. LLC.

The participants had told the court in their request for initial approval that the nonmonetary relief in the settlement made the deal's value even greater than its price tag.  As part of the settlement, ATH Holding's pension committee will retain an independent investment consultant to review the plan's lineup and make recommendations, according to the participants.  The committee will also solicit bids for the plan's record-keeping services and inform participants invested in the plan's money market fund of the option's risks and return history and about the benefits of diversifying their investments, their motion said.

Although they didn't disclose a dollar amount, the parties told Judge Pratt in February that they had reached an agreement.  That was less than a month after the judge denied ATH Holding summary judgment on the participants' fiduciary breach claims.  The participants alleged in their ERISA suit that ATH Holding, its pension committee and others mismanaged their savings by offering the money market fund and allowing the Vanguard Group Inc., the plan's record-keeper, to rack up excessive fees through revenue sharing payments.  Judge Pratt certified two classes in the case — one for the money market fund claims and another for the excessive fee claims.