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Retirement savings are supposed to grow slowly and predictably, like a tree adding rings year after year. For hundreds of workers at a Florida-based car dealership chain, that tree instead lost a chunk of its trunk in a single administrative transition. Rick Case Enterprises, which operates car dealerships across Florida and Georgia, has agreed to settle a proposed class action alleging that 401(k) plan participants lost a substantial share of their retirement savings when the company switched recordkeepers, according to a federal court filing.

The Path Toward Resolution

Rick Case Enterprises and Romeo Hebert, a participant in the company's 401(k) plan, told the court Wednesday they had reached a proposed settlement resolving Hebert's Employee Retirement Income Security Act lawsuit. According to the notice, the parties intend to file a motion for preliminary approval of the deal by Oct. 15 — putting a formal timeline on what has been a lengthy dispute over lost retirement funds.

How the Lawsuit Began

Hebert originally filed suit in November against Rick Case Enterprises, which does business as Rick Case Automotive Group, along with its 401(k) plan, retirement plan committee and several company executives. Based in Sunrise, Florida, the company operates 19 new and used car dealerships, according to its website — a sizable regional operation whose retirement plan apparently hit a serious snag.

The Core Allegation

Hebert alleged that Rick Case breached its fiduciary duties by failing to properly monitor both the investment options offered through the plan and the administrative fees charged, ultimately resulting in workers losing millions of dollars in retirement savings — a claim that strikes at the heart of what employers are legally required to safeguard for their employees.

A Blackout Period With Costly Consequences

According to the complaint, when the Rick Case retirement plan transitioned its recordkeeping and administrative services from Empower Retirement to Principal Financial Group in December 2022, participants' accounts entered a blackout period during which nobody could make changes or even check their account balances — a financial blind spot lasting weeks. When that blackout period finally ended in January 2023, participants discovered their account balances had dropped by 9% compared to their pre-transition values, according to the lawsuit.

Hundreds of Workers Affected

Hebert says the loss impacted more than 770 participants in the Rick Case 401(k) plan. When those workers sought answers from a Rick Case human resources vice president, they reportedly received explanations that shifted and contradicted each other rather than offering any consistent clarity.

Conflicting Explanations Fuel the Complaint

According to the complaint, the HR executive at various points claimed the missing funds would be "returned," that a "market value adjustment fee" had been imposed by an insurance company, and that the losses stemmed from "market fluctuations" and investment activity occurring during the blackout period itself — three different explanations that, taken together, read less like clarity and more like confusion dressed up as reassurance.

A Deeper Structural Problem

The lawsuit also alleged that when workers' retirement funds were moved over to Principal, the money ended up invested in a diversified mix of mutual funds rather than the age-based target-date funds specifically required under the 401(k) plan's qualified default investment alternative mandate — a structural mismatch that, according to Hebert, compounded the financial harm participants experienced.

The Company's Response

In a March answer to the complaint, Rick Case firmly denied breaching its fiduciary duties or mismanaging the transfer from Empower to Principal, setting up what appeared headed toward a protracted legal battle before this week's settlement announcement changed course.

Representatives for the parties did not immediately respond to requests for comment Thursday.

The Legal Teams Behind the Case

Hebert is represented by Robert W. Murphy of the Law Office of Robert W. Murphy and Walter J. Mathews of Walter J. Mathews PA.

Rick Case Enterprises is represented by Andrew M. Gordon, Lauren D. Swanson, James Harbert and Anthony E. Antognoli of Hinshaw & Culbertson LLP.

For the more than 770 workers whose retirement balances shrank during that opaque blackout window, this settlement finally offers a resolution — though the underlying question of exactly why their savings dropped 9% overnight may remain, at least publicly, only partially answered.