Bronson Healthcare Group Inc., Kalamazoo, Mich., has agreed to pay $3 million to settle claims by two former participants that plan fiduciaries violated ERISA in the company's 403(b) plan.
The payment was disclosed in a settlement document filed Jan. 10 in a U.S. District Court in Kalamazoo. The agreement requires court approval.
The parties announced an agreement in principal in November 2021, but they didn't disclose the settlement amount at that time in the case of Gleason et al. vs. Bronson Healthcare Group Inc. et al. The plaintiffs sued in May arguing that plan fiduciaries paid "unreasonably high fees for retirement plan services" and kept certain investment options in the plan lineup "despite the availability of identical or similar investment options with lower costs and better performance," according to the original complaint.
They also complained that the plan should have offered a passively managed target-date series instead of an actively managed one.
The settlement covers participants in the plan from May 6, 2015, through Jan. 10, 2022.
"Each defendant denies each and every allegation of wrongdoing made in the complaint and contends that it has no liability in the action," the settlement document said. "Each defendant specifically denies the allegations that it breached any fiduciary duty or any other provisions of ERISA in connection with the administration of the plan, the administrative fees or expenses incurred by the plan, or the investments in the plan, at any time, and further denies that it in any way failed to act prudently or loyally as to the Plan' participants and beneficiaries."
Plaintiffs' attorneys' fees will not exceed $1 million and expenses will not exceed $50,000, subject to court approval. Payments will be made from the settlement fund.
As of Dec. 31, 2020, the Bronson Healthcare Group Inc. 403(b) Tax Sheltered Matching Plan had $870.4 million in assets, according to its most recent Form 5500 filing.