PPL Corp. has agreed to shell out $8.2 million to settle a class action lawsuit that accused the energy giant of mishandling its retirement plan investments. According to Pennsylvania federal court filings, the company allegedly failed to prune costly, underperforming target date funds from its plan, potentially shortchanging thousands of employees on their retirement savings.
The agreement, which was preliminarily approved by the court on Friday, marks the culmination of a legal battle that nearly went to trial. The workers claimed PPL breached its fiduciary duty by keeping the Northern Trust Focus Funds in the plan’s investment lineup—despite glaring signs of underperformance.
Retirement Funds in the Hot Seat
The lawsuit painted a troubling picture: while other investment options flourished, the Northern Trust Focus Funds lagged, underperforming their peers by 4% to 17% between 2015 and 2017. The employees alleged that PPL had opportunities to swap these funds for lower-cost, higher-performing alternatives but failed to act until 2020—far too late for those relying on their investments to grow.
The settlement, if finalized, will benefit a class of workers who participated in the plan from January 12, 2016, through June 30, 2020. Additionally, six named plaintiffs who spearheaded the lawsuit are requesting $20,000 each in service awards for their role in the case.
