CDI Corp., Philadelphia, agreed to a $1.8 million settlement of a class-action lawsuit against the company alleging it violated its fiduciary duties in the selection of investment options for its 401(k) plan.
The suit, filed by two former employees in July 2020 in U.S. District Court in Philadelphia, said the company, its board of directors and its 401(k) savings plan committee violated the Employee Retirement Income Security Act of 1974 by failing to ensure each investment option offered in the plan is prudent, and that fees and expenses were reasonable.
The plaintiffs filed a motion for order in the court Monday to approve the $1.8 million settlement. The motion did not disclose how the settlement will be distributed.
In the original lawsuit, plaintiffs said the company and other defendants breached their fiduciary duties by "selecting more expensive share classes instead of the lowest-cost institutional shares" of those same funds, which include funds managed by BlackRock, Capital Group, Invesco, J.P. Morgan Asset Management and others.
As of Dec. 31, 2019, the CDI Corp. 401(k) Savings Plan had $247 million in assets, according to the company's most recent Form 5500 filing.
Officials at CDI Corp. could not be immediately reached for comment. Eric Lechtzin, partner at Edelson Lechtzin, attorney for the plaintiffs, declined to comment.