Participants in a Citigroup 401(k) plan have reached a tentative settlement with plan fiduciaries, leading to a $6.9 million payment and the closing of a lawsuit that was filed nearly 11 years ago.
The proposed settlement in Leber et al. vs. Citigroup 401(k) Plan Investment Committee et al. requires approval by U.S. District Court in New York, according to the agreement dated Aug. 1.
In their class-action complaint, three participants argued that Citigroup fiduciaries committed ERISA violations by stacking the investment lineup with proprietary products between Oct. 18, 2001 and Dec. 1, 2005.
The defendants "have denied and continue to deny any liability," according to the proposed settlement document. Lawyers' fees — the amount of which must be approved by the court — will be included in the $6.9 million settlement.
The plaintiffs' argument — articulated through four amended complaints beyond the initial lawsuit — cited the Citigroup plan for offering 16 proprietary products. The lawsuit focused on nine investments that they said lost money and charged higher fees than comparable investments. They said plan fiduciaries failed to monitor the plan to remove "imprudent" investments.
The Citi Retirement Savings Plan had $14.3 billion in assets as of Dec. 31, 2017, according to the latest 11-K statement.
Citigroup declined to comment on the settlement.