In recent ERISA litigation headlines, there was a monumental divide between the nation’s courts in determining who exactly bears the burden of proof in a lawsuit. The original case, Brotherston v. Putnam Investments, LLC was filed against Putnam Investments by plan participants, stating the defendants loaded the plan solely with Putnam’s mutual funds, without exploring if participants of the plan would have benefited by investments overseen by unaffiliated establishments.

The court settlement noted that the hefty $12,500,000 settlement amount was a noteworthy monetary recovery for the Class and fell well within the range of court-approved settlements in similar ERISA litigation cases, detailing it as “substantial, not only in the aggregate, but also on a per-participant basis and a percentage of plan assets.” As for allocating the settlement, the agreement enforced weighting the account balances capitalized in the proprietary funds allied with Putnam four times greater than balances in non-proprietary funds. Former participants could submit a rollover form, granting them distribution rolled over into an individual retirement account or other eligible employer plan. Plan participants who did not submit a form by the deadline would be mailed a check.

What’s more, the settlement provided that the defendants will:

• Arrange annual training on ERISA fiduciary duties for plan fiduciaries.
• Uphold a suite a low-cost third-party passive collective investment trust (“CIT”) choices in the plan.
• Uphold an investment policy statement for the plan.
• Uphold a charter for the Putnam Benefits Oversight Committee (PBIC) that outlines the fiduciary duties and responsibilities of the PBIC and cements its general quarterly meeting schedule.

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