The parent of Amway will pay $1.5 million to settle a lawsuit that accused the company’s 401(k) plan fiduciaries of retaining several poor-performing and high-cost investments, according to a preliminary settlement document filed July 1 in U.S. District Court in Grand Rapids, Mich., by plaintiffs’ attorneys.
Alticor, the Amway parent, also will conduct a record-keeping RFP within five years of the settlement’s approval by the court, according to the terms of Garcia et al. vs. Alticor Inc. et al. The parties reached an initial settlement in May, but the terms weren’t announced then.
Former 401(k) plan participants sued in November 2020 alleging a series of ERISA violations, although some allegations such as claims of excessive record-keeping fees were subsequently dismissed.
“Defendants deny all of these claims and deny that they ever engaged in any wrongful conduct,” said the settlement document whose class-action terms will cover participants and beneficiaries from Nov. 9, 2014, through initial court approval of the agreement.
“If defendants were successful at trial, plaintiffs would receive nothing, thus making the settlement a good result for the settlement class,” the document said. The settlement was achieved through mediation.
Amway Retirement Savings Plan, Ada, Mich., had $1.1 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.
