Current and former participants in a Centerra LLC 401(k) plan will settle an ERISA complaint against the company, its plan fiduciaries and its investment manager, Aon, according to an agreement-in-principle document filed Jan. 12 in a U.S. District Court in Columbia, S.C.
The agreement, signed by attorneys representing plaintiffs and defendants, came one week after a federal judge rejected a $4.5 million settlement between and plaintiffs and Aon in the case of Williams et al. vs. Centerra Group LLC et al. The Centerra defendants, who weren't involved in this agreement, opposed the settlement.
U.S. District Court Judge Sherri A. Lydon on Jan. 5 rejected this settlement, saying it was "prejudicial" to Centerra and its fiduciaries.
Attorneys representing all parties promised to provide details of their agreement by Feb. 2 to the court, which must approve the settlement.
The Centerra plaintiffs sued in December 2020 alleging breaches of fiduciary duties, claiming that a target-date series offered by Aon, formerly known as Aon Hewitt, Investment Consulting, was worse than the target-date series it replaced.
Aon announced on Oct. 27 it would pay a $4.5 million settlement, but the agreement required court approval.
"On the one hand, (the court) cannot say it has ever before received such strong objections to a plaintiff's attempts to dismiss one defendant and settle its claims against another," the judge wrote on Jan. 5, rejecting the agreement.
"On the other hand, it also cannot say it has ever been asked to bless an agreement between two parties that extinguishes a third party's contractual right to indemnification, particularly where that third party had no part in crafting the agreement extinguishing its rights," she added.
Centerra, which provides security services, is a subsidiary of Constellis, Herndon, Va.