Xerox Corporation has agreed, in principle, to settle a 401(k) lawsuit with plaintiffs who alleged plan fiduciaries mismanaged the retirement plan by passing on to participants excessive fees for recordkeeping services.
Xerox will pay the $4.1 million gross settlement amount into a common fund established for the benefit of the settlement class and agree to intended provisions for prospective relief to plan participants, the court filing shows.
“Xerox maintains the company acted prudently and loyally at all times when acting in any fiduciary capacity with respect to the plan,” a spokesperson wrote in an email regarding the litigation. “The settlement avoids the risk and uncertainty of further litigation for both parties.”
Per the settlement, no later than five years from the effective date of the agreement, defendants will use an independent consultant to assist with a request for proposal, fee benchmarking study or other comparative analysis to ensure that the plan’s recordkeeping fees remain competitive, according to the plaintiffs memorandum of law in support of motion for preliminary approval of class action settlement
The settlement and motion for approval follow a full-day on October 11, in-person mediation with mediator David Geronemus, the filing shows.
The plaintiffs, represented by firms Nichols Kaster and Garrison, Levin-Epstein, Fitzgerald & Pirrotti, asked in their filing that the court approve the proposed settlement, calling the relief it grants “meaningful.”
“This relief directly addresses the core issue that plaintiffs raised in the lawsuit and is designed to ensure that the plan’s expenses are reasonable going forward,” plaintiffs’ attorneys wrote in the filing.
“This is a significant recovery for the class compared to the claims that were alleged, and it falls well within the range of negotiated settlements in similar ERISA cases,” the attorneys for the plaintiffs wrote. “The settlement also provides for meaningful prospective relief, as defendants have agreed to retain an independent consultant to assist them in ensuring that the plan’s recordkeeping fees remain competitive in the future by means of a request for proposal, fee benchmarking study, or other comparative analysis.”
The plaintiffs motion asks the court enter an order:
- Preliminarily approving the settlement.
- Approving the proposed notices and authorizing distribution of the settlement notices to the settlement class.
- Certifying the proposed settlement class.
- Scheduling a final approval hearing.
- And granting any other relief described in the proposed preliminary approval order.
“Although defendants dispute the allegations and deny liability for any alleged violations of ERISA or any other law, they do not oppose relief sought in this motion,” the attorneys wrote.
The original complaint was brought before U.S. District Court for the District of Connecticut.
Xerox filed with the court a motion to dismiss the complaint, that was heard and denied by Judge Sarala V. Nagala, in U.S. District Court for the District of Connecticut, earlier this year.
The proposed settlement applies to all participants and beneficiaries of the Xerox Corporation Savings Plan at any time from August 11, 2015, until January 1, 2021—excluding anyone responsible for the plan’s administrative functions or expenses—according to the plaintiffs’ attorneys motion for preliminary approval.
Based on the information provided by defendants, there are approximately 36,000 settlement class Members, according to the document.
Although not published with the memo, a copy of the class action settlement agreement was attached as Exhibit A to “an accompanying declaration of plaintiffs’ attorney Brock Specht,” with the Nichols Kaster firm, the court filing shows.