Rollins Inc. will pay $3.9 million to settle a lawsuit by former employees who accused the company, its fiduciaries and other companies of violating ERISA and mismanaging the Rollins 401(k) plan.
The terms of the settlement were disclosed Nov. 17 in a document submitted to a U.S. District Court in Atlanta. The settlement, which requires court approval, may affect 40,000 people, according to the document filed by the plaintiffs' attorney.
Rollins will pay the full amount in the case of Fleming et al. vs. Rollins Inc. et al. "Defendants do not admit wrongdoing of any kind regarding the plan," the settlement document said. The agreement was reached with the help of a mediator.
One of the defendants, LPL Financial LLC, was dismissed Jan. 30, 2023, from the case by U.S. District Court Judge Eleanor L. Ross, who rejected five ERISA allegations by the plaintiffs. LPL is a broker-dealer and was an investment adviser to the plan, according to court documents.
The other defendants were dismissed by the plaintiffs, the settlement document said. They are Alliant Insurance Services LLC and Alliant Services Inc. The Alliant companies provide commercial insurance, employee benefits and retirement plan consulting, and they were investment advisers to the plan.
Prudential Insurance and Annuity Co. and Prudential Bank & Trust were dismissed by the plaintiffs. Empower Retirement acquired Prudential's record-keeping business in April 2022. The Prudential defendants are the plan's record keeper and directed trustee, according to court documents.
The parties told the court they had reached an agreement in principle in September, but they didn't provide details at that time.
The plaintiffs sued in December 2021 alleging, among other things, excessive record-keeping fees, poor investment management, excessive management fees and self-dealing.
All of the defendants had sought dismissal of the lawsuits. Although Judge Ross dismissed LPL from the case, she rejected the Rollins petition to dismiss all charges. She dismissed some allegations and allowed some allegations to proceed to trial for the Alliant defendants and for the Prudential defendants.
The Rollins 401(k) Savings Plan, Atlanta, had $979.6 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.