Astellas US LLC and Aon will pay $9.5 million to settle an ERISA lawsuit filed by participants in an Astellas 401(k) plan, according to a settlement document filed June 23 by attorneys for the defendants and participants in a U.S. District Court in Chicago.
The payment will be split evenly between the defendants in Wachala et al. vs. Astellas US LLC et al. The parties filed a preliminary settlement notice with the court in May, but they didn't provide details at that time.
The plaintiffs sued Astellas, a pharmaceutical company, and Aon, the sponsor's investment adviser in July 2020. At the time, Aon was known as Aon Hewitt Investment Consulting.
In April 2021, U.S. District Court Judge Ronald A. Guzman dismissed some allegations but allowed most to proceed to trial, including plaintiffs' assertions that the plan should have offered lower-cost shares of mutual funds and that plan executives failed to monitor the process by which Aon selected investments.
"Defendants admit no wrongdoing or liability with respect to any of the allegations or claims in this action," said the settlement document in the class-action lawsuit, which requires court approval.
"Defendants maintain that they are without fault or liability and are settling the class action solely to avoid litigation costs," the document said. "Defendants contend that the plan has been managed, operated, and administered at all relevant times reasonably and prudently, in the best interest of the plan and the plan participants, and in compliance with ERISA and applicable regulations."
The defendants also agreed to several non-monetary terms. Within a year of the settlement receiving court approval, Astellas will conduct an RFP for investment advisory services. Aon may apply.
Within 90 days of the settlement's approval, Astellas will, for three years, instruct any record keeper to avoid using any plan data to cross-sell non-plan investments to participants unless specifically requested by a participant, the document said. Such cross-selling includes individual retirement accounts, insurance, investment products and wealth management services, the document said.
Astellas U.S. Retirement and Savings Plan, Northbrook, Ill., had $1.7 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.