LinkedIn Corporation agreed to settle a lawsuit filed by current and former participants of its 401(k) plan who alleged that the company and plan fiduciaries violated the Employee Retirement Income Security Act (ERISA).
The plaintiffs sued LinkedIn and plan fiduciaries in 2020, alleging high fees and poor judgment in selecting investment options. The LinkedIn Corporation 401(k) Profit Sharing Plan and Trust, Sunnyvale, California, had $1.28 billion in assets as of July 1, 2019, according to its Form 5500.
LinkedIn's motion for summary judgment was partially granted and most of the claims against it were dismissed.
However, the federal district court ruled that one issue had merit.
The plaintiffs had alleged that the 401(k) plan retained an actively managed target-date series from Fidelity Investments instead of a passively managed target-date series. The actively managed investments charged higher fees than the passively managed fund.
The actively managed investment was withdrawn as an option in 2019, but the court found that "plaintiffs have adequately pled breach of prudence based on excessive management fees" for the actively managed target-date series.
Following mediation, the parties recently filed an agreement to settle in principle. No terms were disclosed. "LinkedIn settles ERISA lawsuit over 401(k) investment options" www.pionline.com (Nov. 08, 2022).