Estee Lauder Inc. will pay $975,000 to settle an ERISA lawsuit filed by former 401(k) plan participants, who alleged the plan charged excessive record-keeping fees and fiduciaries failed to adequately review the cost of the plan's investments.
A settlement document, which requires court approval, was filed Sept. 25 in U.S. District Court in New York. The class-action settlement covers the consolidation of lawsuits filed in June 2020 and July 2020, now known as Caroleo and Gandy vs. Estee Lauder Inc. et al.
"Plaintiffs believe the settlement is an excellent result, providing substantial, immediate payment to settlement class members and eliminating the risks and cost of trial," said the settlement document filed by the plaintiffs' attorneys.
The agreement was achieved through mediation, they added. An agreement in principle was announced in August this year, but no terms were provided at that time.
The defendants deny all claims and "deny that they ever engaged in any wrongful conduct," the document said.
The settlement calls for the defendant to conduct an RFP for record-keeping services within three years of the court-approved settlement date if it hasn't already done so.
The agreement also called for fiduciaries to undergo two hours or fiduciary training annually "to the extent not already in place," the document said.
The RFP and training provisions "address the allegations at the heart of this litigation and, as such, add significant value to the settlement," the document said.
As of Dec. 31, 2021, Estee Lauder Cos. 401(k) Savings Plan, New York, had $2.8 billion in assets, according to its latest Form 5500 filing.