T. Rowe Price has reached a preliminary settlement agreement with retirement plan participants to resolve a fiduciary breach claim brought against it under the Employee Retirement Income Security Act (ERISA).

According to the motion for preliminary approval, T. Rowe Price has agreed to contribute $7 million into a qualified settlement fund. In addition to the monetary terms, the preliminary settlement includes a requirement that T. Rowe Price offer a brokerage window providing access for retirement plan participants to nonproprietary funds. The agreement requires court approval.

The class action settlement comprises all participants and beneficiaries in the T. Rowe Price U.S. retirement program who had a balance in a plan account at any time from February 14, 2011, through the date of entry of the order preliminarily approving the settlement, the memorandum of law states. The settlement agreement requires the defendants to make available to participants a brokerage window option for the duration of the settlement period and to permit plan participants to allocate all or a portion of their plan balances to investments provided through the brokerage window.

The defendants deny all allegations of wrongdoing and deny all liability for the claims in this action.

The plaintiffs’ class had claimed that T. Rowe Price violated its fiduciary duties under ERISA by restricting access to solely T. Rowe Price funds. In the complaint, the plaintiffs accused the plan’s trustees of breaching their fiduciary duties under ERISA by either failing to remedy their predecessors’ breaches or, in some cases, offering expensive retail class versions of propriety mutual funds and waiting too long to shift to lower cost versions of the funds.

The defendants argued that plan documents required the plan’s trustees to select an exclusive lineup of T. Rower Price funds. The plaintiffs asked an appellate court to consider whether a document mandating that T.  Rowe Price funds be offered in its 401(k) plan violated ERISA. The interlocutory appeal on the document issue was denied.

Previously, Chief Judge James K. Bredar of the U.S. District Court for the District of Maryland dismissed the defendants’ argument and allowed the lawsuit to proceed.

“Regardless of the reasons that T. Rowe Price may have chosen to restrict the trustees to investing only in in-house funds, it does not provide a blanket defense for the plan trustees. The plaintiffs’ allegations that related to the use of the more expensive retail funds rather than commercial funds, the allegations that related to retaining chronic underperforming funds, and the allegations that related to seeding remain plausible. The plaintiffs provide specific examples, not merely conclusory statements, and the court is required to accept those factual allegations as true at this stage of the proceedings. The defendants argue with regard to each one of the plaintiffs’ theories that the allegations, standing alone, are insufficient. But the plaintiffs have alleged multiple grounds to support their claim; the allegations related to any one theory do not stand alone but must also be reviewed as a combined set,” Bredar wrote.