A class action is a lawsuit in which one or more plaintiffs sue on behalf of a group of people who allegedly have similar claims. After the Parties reached an agreement to settle this Action, the Court granted preliminary approval of the Settlement. Among other things, this preliminary approval permits Class Members to voice their support of or opposition to the Settlement before the Court makes a final determination as whether to approve the Settlement. In a class action, the court resolves the issues for all Class Members.

Plaintiff filed a class action complaint against Costco on behalf of a class of Plan participants, alleging that Costco caused the Plan to incur higher administrative fees and investment management fees than reasonable and necessary.  A complete description of Plaintiff’s allegations is in the Amended Complaint, which is available HERE.

Costco denies Plaintiff’s claims and allegations in their entirety, denies that it is liable at all to the Plaintiff or the Class Members, and denies that the Plaintiff, Class Members or the Plan have suffered any harm or damage for which Costco could or should be held responsible. Costco believest its conduct was lawful. Costco is settling the Action solely to avoid the expense, inconvenience, and inherent risk and disruption of litigation.

The Court has not decided in favor of either side in this Action. Instead, both sides agreed to a settlement. That way, both sides avoid the cost and risk of a trial, and the affected current and former Plan participants will get substantial benefits that they would not have received if Plaintiffs had litigated the case and lost. The Plaintiffs and their attorneys believe the Settlement is in the best interests of the Class Members and the Plan.

The Court decided that everyone who fits this description is a Class Member:

All participants, beneficiaries, and alternate payees of the Costco 401(k) Retirement Plan (excluding the Defendants or any participant/beneficiary who is a fiduciary to the Plan): (1) who have a Plan account as of the date the Settlement Class is certified by the Court or (2) who do not have a Plan account as of the date the Settlement Class is certified by the Court, and had a Plan account on or after the last business day of a month on and after May 30, 2014, provided that such Plan account attained a balance in excess of $1000 for at least 12 months beginning on and after May 30, 2014 (such balance and months to be calculated as of the last business day of a month).

The “Class Period” is defined as May 30, 2014 through March 17, 2022, the date of Preliminary Approval.

The proposed Settlement provides the following:

• Current Participants: Costco has agreed to provide an administrative fee reduction allocated among Current Participants with a maximum value of $3,200,000. Costco will ensure that the Plan Administrative Service Per Capita Recordkeeping Fee deducted from Plan accounts does not exceed $3.25 per Plan account per quarter for as many quarters as it takes for the reduction to equal $3,200,000 in the aggregate.
• Former Participants and eligible Current Participants (Current Participants who cease to have a Plan account by the Settlement Effective Date): Costco has agreed to establish a $400,000 Former Participant Pool against which Former Participants will be entitled to make a claim for payment. The amount of each Former Participant Class Member’s payment will be based on the number of quarters his or her Plan account balances exceeded $1,000 during the Class Period and will be determined according to a Plan of Allocation in the Settlement Agreement. Payments to former Plan participants who submit a claim will be made directly to former Plan participants by check.

To be eligible for a distribution from Former Participant Pool, you must either be a (1) an eligible “Current Participant” as defined on page 1 of the Notice, or (2) an “Authorized Former Participant” (a “Former Participant” as defined on page 1 of the Notice, who submitted a completed, satisfactory Former Participant Claim Form that is postmarked by the deadline).

No amount shall be distributed to a Former Participant or eligible Current Participant that is five dollars ($5.00) or less, because such an amount would cost more in processing than its value.

Whether you need to submit a claim form to receive your benefits depends on whether you are considered a “Current Participant” or a “Former Participant.” Current Participants will automatically receive benefits if the Settlement is Finally Approved by the Court. Former Participants must submit a claim to receive benefits. If you are a Former Participant, you may download a Claim Form HERE.

If you are a current Plan participant, then you will receive your share of the Settlement in the form of reduced Plan Administrative Service fees once the Settlement has received final approval and/or after any appeals have been resolved in favor of the Settlement. The hearing to consider the final fairness of the Settlement is scheduled for July 18, 2022.

If the Court approves the Settlement, you will be bound by it and will receive whatever benefits you are entitled to under its terms. You cannot exclude yourself from the Settlement, but you may notify the Court of your objection to the Settlement. If the Court approves the Settlement, it will do so under Federal Rule of Civil Procedure 23(b)(1), which does not permit Class Members to opt out of the Class.

A Fairness Hearing has been set for July 18, 2022 at 9:30 a.m. The hearing may be conducted telephonically, by video conference, or in person before The William C Griesbach in Courtroom 201 at 125 S. Jefferson St., Green Bay, WI 54301. At the hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. The Court will hear any comments, objections, and arguments concerning the fairness of the proposed Settlement, including the amount requested by Class Counsel and Local Counsel for attorneys’ fees and expenses and the incentive award to Plaintiffs as the Class Representatives. You do not need to attend this hearing. You also do not need to attend to have an objection considered by the Court.

Note: The date, time, and location of the Fairness Hearing are subject to change by Court Order, but any changes will be posted on this Settlement Website.