International Paper has agreed to pay $30 million and make some major changes to its retirement plans to settle an excessive fees lawsuit brought by current and former plan participants.
The case, which was filed on Sept. 11, 2006, was one of the first such cases to be filed against a 401(k) plan by participants who claimed they paid $58 million in unreasonable recordkeeping and administration fees.
The lawsuit also asserted that International Paper forced employees to put money into company stock if they wanted to receive an employer matching contribution. Plan participants were prohibited from taking money out of the Company Stock Fund until they reached age 55 and they could only withdraw 20 percent per year after that. So, the Company Stock Fund held up to 57 percent of the plan's assets, with more than one-third of participants holding over 90 percent of their account balances in company stock.
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