In keeping with the current trend in ERISA litigation, two more cases recently were resolved via settlement agreements between the litigants.
- Gordan v. Mass. Mutual Life Ins. Co. (United States District Court for the District of Massachusetts): In this class action lawsuit that was filed in 2013, the plaintiffs are participants in the retirement plans at issue, and the defendants are Massachusetts Mutual Life Insurance Company and various individuals and committees whom the plaintiffs alleged are fiduciaries of the plans. The plaintiffs asserted various breaches of fiduciary duty, and prohibited transactions, in several areas frequently addressed in ERISA litigation over the past few years (e.g., investment options’ and service providers’ selection, monitoring, oversight, and expenses, as well as performance of the plans’ investment options).
On June 15, the parties filed a settlement agreement with the court. Under the agreement, the defendants deny all of the plaintiffs’ claims, deny that the plaintiffs suffered any losses, and maintain that they acted prudently at all times in connection with the plans. Nonetheless, the defendants have agreed to pay the amount of $30,900,000.00 (which will be used to pay the plaintiffs, as well as attorneys’ fees and other litigation costs), to ensure that the plans’ participants are charged no more than $35.00 per participant for standard recordkeeping services for approximately a five-year period, and to take several other steps (e.g., attend a fiduciary responsibility presentation provided by experienced ERISA counsel).
- Dennard v. Transamerica Corp. (U.S. District Court for the Northern District of Iowa): This class action lawsuit was filed in 2015. The plaintiffs allege that the defendant’s 401(k) plan suffered losses as a result of defendant plan fiduciaries violating their ERISA duties to the plan. More specifically, the plaintiffs argued that those fiduciaries failed to act solely in the interest of plan participants when selecting, removing, replacing, and monitoring the plan’s investment options. Conversely, the defendants continue to deny the plaintiffs’ allegations by asserting that the plan’s administrative fees were reasonable and that the practice of offering Transamerica’s own products as investment options is common and lawful.
On June 10, the presiding judge recommended that the court approve the parties’ settlement agreement. Under the agreement, “structural changes” will occur in the way the plan is administered, and the defendant will pay $3,800,000.00 to a settlement fund.