Aug. 4, 2020
By Walt Williams
The National Rural Electric Cooperative Association will pay $10 million to settle a class-action lawsuit alleging the group failed to control costs in its 401(k) pension program.
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According to court papers filed July 31 in the U.S. District Court for Eastern Virginia, NRECA agreed to establish a $10 million fund that will be divvied out to current and former participants in its pension program after attorneys’ fees and administrative costs are deducted. Attorneys’ fees are not to exceed one-third of the full amount.
NRECA administers a defined contribution plan on behalf of participating electric cooperatives. Two participants—Thaddius Intravaia and Steven Marvik—sued the association in 2019 for failing to control administrative costs and redirecting money from the program into other parts of the organization. NRECA shot back, saying the suit was trying to make an apples-to-oranges comparison of the group’s multi-employer plan with single-large-employer plans.
NRECA denies all wrongdoing in the settlement, saying the agreement should not be viewed as an admission of guilt. Rather, the decision was made to avoid the risks and uncertainty of further litigation.
NRECA was represented by Groom Law Group in Washington, D.C. The plaintiffs were represented by law firms Zipin, Amster & Greenberg and Nichols Kaster.
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