Case Against ‘Small’ 401(k) Plan Settled

A $500,000 settlement has been reached in a lawsuit alleging that fiduciaries to the $500 million 401(k) program offered by Pioneer Natural Resources USA breached their Employee Retirement Income Security Act (ERISA) duties regarding investments and investment fees.

The list of breaches alleged includes “failing to offer institutional class shares for mutual funds, which resulted in the participants paying excessive costs to invest in the funds; failing to make sure that plan fees were reasonable; and failing to remove the poorly performing money market fund when the better-performing stable value fund was already available, causing losses to plan participants who maintained excessively high cash balances in money market funds rather than the stable value fund, which offered higher returns and the same risk level.”

Plaintiffs put forward similar allegations regarding the plans’ failure to utilize the fee efficiency of collective investment trusts (CITs).

According to the settlement agreement, released claims do not include the money market claim raised in the case, which will be dismissed without prejudice as a condition of settlement—meaning a new complaint could be filed.

The parties agree that “nothing in this agreement, including the furnishing of consideration for this agreement, shall be deemed to constitute any finding or admission of any wrongdoing or liability by any of the defendants, or give rise to any inference of wrongdoing or liability in the action or any other proceeding.”