Ameriprise Financial Inc., Minneapolis, will pay $27.5 million as part of a preliminary settlement with participants in its 401(k) plan, said a court document published Thursday.
The participants in the class-action lawsuit had alleged that record-keeping and investment management fees were excessive, constituting a breach of fiduciary duty,
The preliminary agreement in Krueger et al. vs. Ameriprise Financial et al. must be approved by a federal district judge, Jerome Schlichter, the lead attorney for the plaintiffs said in an interview Thursday. Mr. Schlichter is founding and managing partner of the law firm Schlichter, Bogard & Denton, St. Louis.
The agreement involving the $1.58 billion DC plan also contains several non-monetary provisions, which Mr. Schlichter said represents “best practices” for the industry.
According to the settlement document, Ameriprise said it acted prudently, denied that plaintiffs suffered any losses and denied any allegations of wrongdoing.
“The settlement does not require any changes to our plan, which will maintain the existing broad and competitive selection of investment options and features,” John Brine, an Ameriprise spokesman, wrote in an e-mail Thursday. “The plan has always included funds we manage, as well as funds from other companies and a brokerage window that offers participants additional choice.”
Participants in the Ameriprise 401(k) plan filed suit in September 2011, contending the plan breached its fiduciary duty for allegedly excessive fees as well as a breach of fiduciary duty for offering some investment options from Columbia Management Investment Advisers, which is owned by Ameriprise.
The case was set to go to trial on April 13.
Among the other terms of the settlement, Ameriprise agrees that its 401(k) plan investment committee “shall continue not to include” any executives of Columbia Management Investment Advisors or investment management affiliates, the settlement document said. For any investment option, Ameriprise “shall continue to consider the use” of collective investment trusts or separately managed accounts, the settlement document said.