Accounting firm BDO USA LLP will pay $2.25 million to settle a lawsuit filed by former employees who said the company's 401(k) plan violated ERISA by offering high-price mutual fund shares, keeping poor-performing investments and charging excessive record-keeping fees.
The terms were filed Feb. 6 in a U.S. District Court in Chicago, which must approve the class-action settlement in Gaines et al. vs. BDO USA LLP et al.
The parties reached an agreement in principle in December with the aid of a mediator, but they didn't disclose the settlement terms at that time.
"Defendants admit no wrongdoing or liability with respect to any of the allegations or claims in the lawsuit," the document said. "The plan was managed, operated and administered in full compliance with ERISA and applicable regulations."
The former employees sued in April 2022 alleging the plan offered retail-priced mutual funds instead of institution-priced mutual funds, retained poor-performing investments, charged excessive record-keeping fees and charged excessive investment management fees.
In March 2023, a federal judge in Chicago dismissed the two excessive-fee allegations but said the other complaints could go to trial.
"If the court approves the settlement, the present litigation will come to an end and class members will realize immediate benefits as a result," the settlement document said. "If the court denies approval, however, protracted litigation over several years would likely ensue."
BDO USA LLP Retirement Plan, Chicago, had $1.4 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.