NextEra Energy Inc., one of the largest electric power and energy infrastructure companies in North America, and the parent company of Florida Power & Light, has agreed to pay $8 million to settle a proposed class-action lawsuit alleging fiduciary breaches in its employee retirement plan, according to a settlement agreement filed in federal court.
The lawsuit, Stewart v. NextEra Energy, Inc., was originally filed September 25, 2023, in the U.S. District Court for the Southern District of Florida. It alleged that the company violated the Employee Retirement Income Security Act (ERISA), specifically Section 404(a)(1)(A), which requires fiduciaries to act solely in the interest of plan participants and beneficiaries, and Section 404(a)(1)(B), which requires fiduciaries to act with the care, skill, prudence, and diligence that a prudent person would use under similar circumstances. The complaint also referenced Section 406, which prohibits certain self-dealing and conflicted transactions.
Plan participant John Stewart brought the case on behalf of participants in the company's retirement savings plan beginning in 2017. The complaint claimed that plan fiduciaries failed to prudently monitor recordkeeping costs and misallocated forfeitures that should have been used to offset participant expenses. It also challenged aspects of the plan's investment lineup, including company stock options.
NextEra denies the allegations and maintains that it complied with ERISA and fulfilled its fiduciary obligations at all times. The agreement states that NextEra is entering into the settlement to avoid the expense, inconvenience, and risks of continued litigation and that the settlement does not constitute an admission of liability, wrongdoing, or fault.
Under the agreement, NextEra and its insurers will fund an $8 million gross settlement amount. The funds will be placed into a qualified settlement fund and distributed to eligible class members after deductions for court-approved attorneys' fees, capped at up to one-third of the gross settlement amount, as well as litigation expenses and administrative costs.
Participants with active plan accounts will receive allocations directly into those accounts. Former participants without active accounts may receive checks.
The proposed settlement remains subject to court approval, including a final fairness hearing. An independent fiduciary, Gallagher Fiduciary Advisors, will review and approve the settlement on behalf of the plan before final court approval.
The NextEra settlement comes amid a growing wave of ERISA litigation targeting 401(k) plans over recordkeeping costs, forfeiture allocations, and fiduciary oversight, reflecting heightened scrutiny of plan fees and administration.
————————————————————
From: BenefitsPRO
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.