Bessemer Trust Co. agreed to pay $5 million to settle a lawsuit by former members of the company’s 401(k) plan who alleged that the plan’s leaders violated ERISA by favoring the company’s mutual fund business.
“While Defendants dispute the claims of named Plaintiffs and deny any and all liability for any alleged violations of ERISA or any other law, they do not object to the relief sought in this Motion,” the Plaintiffs’ lawyers said in a notice of settlement filed on March 10. in the US District Court in New York.
The plaintiffs argued that Bessemer’s heavy use in his 401(k) plan of investments from his Old Westbury mutual fund was reckless and in violation of ERISA.
The original lawsuit was filed by a single plaintiff in January 2022 in U.S. District Court in Newark, New Jersey. The complaint went to the US District Court in New York and the complaint was later amended to add a second plaintiff in Peku v al v. Bessemer Trust Co. and etc.
Although the defendants filed a motion for dismissal, both parties entered into mediation, telling U.S. District Court Judge Mary Kay Viskocil to delay the decision while they negotiate.
“There is no doubt that continuing the litigation would have resulted in a complex and costly proceeding and would have delayed the receipt of any relief for the class, even if the named plaintiffs ultimately won,” the plaintiffs’ lawyers wrote in the settlement notice.
The collective settlement, subject to court approval, applies to all members of the Bessemer Trust Company 401(k) and Profit Sharing Plan, Woodbridge, NJ from January 26, 2016 until the date of the actual settlement.
According to the most recent Form 5500, as of December 31, 2021, plan assets were $610.1 million.