Bank Of America / Countrywide Financial Settle ERISA Class Action Suit For $55M
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UPDATED: Jul 14, 2021
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Bank of America and its mortgage lender subsidiary, Countrywide Financial Corporation, have agreed to settle a class action lawsuit which alleged that California based Countrywide violated ERISA (Employee Retirement Income Security Act) by misleading employees about its financial situation and causing their pension / 401(k) funds to plunge. While they settled their case for $55 million, how can you tell if you have an ERISA case?
Banks don’t admit liability
Countrywide employees alleged that the company lost over $700 million in 2007, but failed to inform employees about exactly how bad the company had performed. As a result, the value of the employees’ retirement plans plunged. They filed a California ERISA class action lawsuit against Countrywide and its executives and directors. A $55 million settlement was announced in August 2009, although the banks did not admit any wrongdoing or liability. Bank of America, which purchased Countrywide in January 2008, will be liable for the settlement.
Do you have an ERISA case?
Employers are responsible for correctly managing pension / 401(k) funds, but don’t always do so as the above cases shows. ERISA attorneys say that if the company is the plan ‘fiduciary,’ either because it is named as the fiduciary or because it is responsible for managing the funds, then it has a very high duty. In fact, it must put aside its own personal interests and manage the funds solely in the interests of the plan participants and beneficiaries.
To find out whether you might have an ERISA case, look at your summary annual report. It will show you how much money came in, how much the plan’s earnings were (significant negative numbers are an alarm bell), how much the expenses were and how much is left over.
If something doesn’t look right, contact your plan administrator and ask for a copy of Form 5500 – which will have all the information you need. If you can’t get a straight answer, call the U.S. Department of Labor and file a complaint or contact an ERISA attorney to discuss your situation and evaluate your legal options. You may be entitled to compensation.