DeMoulas Super Markets settled for $17.5 million in a class-action lawsuit regarding its profit-sharing plan that didn’t have a 401(k) feature.

The problem in the case was that the Super Market invested assets of the plan too conservatively for its employee. The profit-sharing plan had approximately 11,000 to 13,000 and between $580 million and $756 million in assets between 2013 and 2017. The profit-sharing plan contained only one investment into which participants were automatically invested. The plan’s investment policy statement (IPS) called for 70% of participants’ assets to be automatically allocated into domestic fixed income options and 30% to be put into equities.

The default target allocations might have been good for someone nearing retirement, but not so great for someone who was decades away from retirement. I’m just surprised that a profit-sharing plan that was apparently trustee directed, would have such an allocation like that.