Coca-Cola Consolidated Inc. agreed to pay $3.5 million to settle a lawsuit by participants in the company's 401(k) plan who claimed plan fiduciaries violated their ERISA duties by allowing "unreasonable" expenses and keeping high-cost, poor-performing investments in the plan's option lineup.
The agreement, which requires court approval, was filed Feb. 22 in U.S. District Court in Charlotte, N.C. in the case of Cheyenne Jones and Sara J. Gast vs. Coca-Cola Consolidated Inc.
"Defendants have vigorously denied, and continue to vigorously deny, any wrongdoing and any liability arising from the factual allegations and claims set forth in the plaintiffs' complaint," said the preliminary agreement document filed by attorneys representing both parties.
The settlement "is not an admission of liability by any of the defendants, which defendants continue to deny," the document said.
The parties decided to settle "because it provides substantial and meaningful benefits to the members of the class and the plan, and to avoid the substantial costs, uncertainties and risks of continued litigation," the document said.
As part of the settlement, Coca-Cola Consolidated, a large independent bottler of Coca-Cola products, agreed to issue an RFI for record keeping services no later than Dec. 31, 2024. It also agreed to "evaluate its process" for replacing investments within one year of the settlement's effective date, the document said.
The plaintiffs sued in November 2020, and a U.S. District Court judge denied the defendants' motion to dismiss in March 2021. Discussion with a mediator led to the parties reaching an agreement in principle in January, the document said.
The Coca-Cola Consolidated Inc. 401(k) Plan, Charlotte, N.C., had assets of $857.3 million as of Dec. 31, 2020, according to the latest Form 5500.