Wal-Mart Stores, Inc. ERISA Class Action
A Settlement has been approved by a federal court in Missouri in a class action lawsuit against Wal-Mart Stores, Inc. and certain of its current and former directors and officers (“Wal-Mart”) and Merrill Lynch, Pierce, Fenner & Smith Inc., Merrill Lynch Trust Company of America, and Merrill Lynch & Co. Inc. (“Merrill Lynch”) (collectively, “Defendants”), alleging breaches of fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”), in connection with the Plan. In particular, this lawsuit alleges that certain fees and expenses charged to the Plan and to certain individual Plan participant accounts by mutual fund companies and collected by Merrill Lynch were excessive in light of the size of the Plan and that these excessive fees were charged without properly disclosing them to Wal-Mart, the Plan, or Plan participants. Defendants deny any liability in the Action. Both sides agreed to the Settlement to avoid the cost and risk of further litigation and/or to provide a recovery to the members of the Settlement Class.
The Court held a hearing on the Final approval of the Settlement and for approval of the Class Plaintiff’s petition for attorneys’ fees and expenses and compensation to the Class Plaintiff on Wednesday, March 7, 2012, before United States District Court Judge Gary A. Fenner, during which objections from three class members were heard. Following the fairness hearing, the Court entered its final order and judgment on March 19, 2012, approving the settlement and plan of allocation. A copy of the Final Order and Judgment is available in the “Document Links” section of this website.
A Notice of Pendency of Class Action and Proposed Settlement (“Class Notice”) containing summary information about the Settlement is available in the “Document Links” section of this website and has also been published on www.Walmartbenefits.com, www.mywalmart.com, and the portion of www.benefits.ml.com exclusively available to participants in the Plan. The terms and conditions of the Settlement are fully set forth in the Settlement Agreement dated December 2, 2011, a copy of which is also available in the “Document Links” section of this website. Capitalized and italicized terms used in the Class Notice and on this website but not defined in the Class Notice or on this website have the meanings assigned to them in the Settlement Agreement.
As described below, in accordance with the Plan of Allocation approved by the Court, the Settlement will provide for payment directly to the Plan to be used by the Plan to pay certain Plan expenses and administration fees, which will reduce the amount of fees that otherwise would be charged to individual Plan accounts in the future. In addition, for a two-year period, the Settlement provides for the Retirement Plans Committee’s continued offering of low-cost investment options, as well as new information about fees and improvements to participant education about saving for retirement.
First, the Settlement provides for a payment of $13.5 million, paid by Merrill Lynch and by Wal-Mart and/or its insurer, to settle all claims against Defendants. The Settlement proceeds, minus Court-approved fees and expenses described in the Settlement Agreement and Notice (which include attorneys’ fees and litigation expenses, a case contribution award to the Named Plaintiff who brought the lawsuit, and taxes and other costs related to the Settlement) will be paid directly to the Plan to be used by the Plan to pay Plan expenses and administration fees, which will reduce fees that otherwise would be charged to individual Plan accounts in the future, according to the Court-approved Plan of Allocation.
Second, the Settlement provides for the Retirement Plans Committee’s continued offering of low-cost investment options, as well as new information about fees and improvements to participant education about saving for retirement.
If you qualify, you are entitled to benefit from the payment of Plan expenses and administration fees through the Plan of Allocation, as well as certain Non-Monetary Considerations described in the Settlement Agreement. Information concerning how this will affect your Plan account is not available because that amount will be based on (a) the amount of Plan expenses or administration fees following the Effective Date of Settlement; (b) whether you have an individual Plan account at the time that Plan expenses or administration fees would otherwise be charged to individual Plan accounts but which will be paid by the Net Proceeds of the Settlement Fund; and (c) the Plan of Allocation. You do not need to submit a claim or take any other action. Fees previously charged to your Plan account are not eligible for reduction under the Settlement.
Members of the Settlement Class do not have the right to exclude themselves from the Settlement in this case. Members of the Settlement Class are bound by any judgments or orders that are entered in this Action, and are deemed to have released all Defendants from all claims that were or could have been asserted in this case, other than their right to obtain the relief provided to them, if any, by the Settlement.
For additional information about the settlement and your legal rights, please review the Class Notice, Settlement Agreement, Final Order and Judgment and other documents available under the ” Case Documents” section of this website.