CDI Corporation 401(k) Retirement Plan Class Action
CASE UPDATE: In March 2021, CDI agreed to settle this action for $1,800,000 in monetary relief for the Class (less Class Counsel’s fees and costs and service awards to the Class Representatives). This settlement was reached after the parties engaged in mediation before U.S. Magistrate Judge Rice. A final approval hearing is set for November 22, 2021.
For Members of the Settlement Class who have an open account in the Plan as of the date of entry of the Final Approval Order, the distribution will be made directly into your account. For those Members of the Settlement Class who no longer have an account in the Plan as of the time of distribution, the distribution will be made via a tax-qualified distribution process, which will transfer such funds to the Settlement Administrator, to be deposited into a safe-harbor automatic rollover individual retirement accounts as described in 29 C.F.R. § 2550.404a.2.
Edelson Lechtzin LLP has filed an ERISA breach of fiduciary duty class action lawsuit on behalf of participants in the CDI Corporation 401(k) Plan in the Eastern District of Pennsylvania.
Two former employees of CDI Corp. allege that CDI, its Board of Directors, and the CDI Corp. 401(k) Savings Plan Committee breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) in the suit filed in Pennsylvania federal court.
The Complaint alleges that CDI failed to use the plan’s “substantial bargaining power” to lower the costs paid by Plan participants, including by not taking advantage of institutional class shares that were an identical, cheaper alternative to ones used by the plan, stating: “There is no good faith explanation for utilizing a high-cost share class when a lower-cost share class is available for the exact same investment.”
And the company also failed to evaluate and remove funds with a historically bad performance, the workers said.
Additionally, the Complaint asserts that CDI and the other defendants hired investment advisers and consultants that had conflicts of interest and did not keep the compensation provided to the plan’s record-keeper under control, stating: “Given the prevailing trends in the competitive marketplace for record-keeping services during this time period, the exact opposite should have occurred.”
The proposed class covers participants and beneficiaries in the CDI 401(k) Plan from July 2014 to the present, excluding the defendants and their immediate families. As of December 2018, there were 7,030 plan participants with account balances.
The case is Crawford et al v. CDI Corporation et al, Case No. 2:20-cv-03317-CFK (E.D. Pa.).