Fujitsu has settled for $14 million a class-action lawsuit against its American subsidiary and 401(k) plan executives alleging the plan violated its ERISA duties by paying high fees for investment options.
The lawsuit, Johnson et al. vs. Fujitsu Technology and Business of America Inc. et al., filed June 30, 2016, in U.S. District Court in San Francisco, alleged that plan executives "failed to utilize the least expensive share classes for many mutual funds with the plan," according to the original court filing.
In the Dec. 6 settlement filing, the "defendants admit no wrongdoing or liability with respect to any of the allegation or claims in the complaint or amended complain, any wrongdoing or liability being expressly denied by defendants and each of them."
The original complaint alleged that plan executives paid record-keeping expenses "far in excess of what a prudent fiduciary would pay for those same services," and also argued that the plan had offered and implemented an "imprudently" designed custom target-date fund series.
Until July 31, 2015, the lawsuit said defendant Shepherd Kaplan LLC, an investment adviser, was a "named investment fiduciary" that designed the custom target-date series. In March 2016, the Fujitsu 401(k) plan replaced the target-date series with a new series designed by Callan, the lawsuit added.
As of Dec. 31, 2016, the Fujitsu Group Defined Contribution and 401(k) Plan had $1.35 billion in assets, according to the company's most recent Form 5500 filing.
In a statement emailed by a spokesman, Fujitsu said: "The reporting we have seen so far has been based almost entirely on rote repetition of allegations in the amended complaint. Those allegations are denied in the answers filed by the defendants, to which we refer anyone interested in the real posture of this case at the time of settlement."
"We are confident that, if this case had proceeded further, we would have prevailed against many or all of the claims against us. However, the history of cases of this nature is that they are complex and expensive to litigate, and that the resolution of them can take as long as a decade. Therefore, we came to conclude that this settlement at this time is in the best interests of everyone," the statement said.