FirstGroup America Inc. asked a federal court in Cincinnati to reject a $4.5 million settlement by Aon Investments USA, its co-defendant in an ERISA lawsuit alleging high fees and a "radical redesign" of a FirstGroup 401(k) plan for which Aon was the investment consultant.
Aon, formerly known as Aon Hewitt Investment Consulting, agreed to a preliminary settlement Dec. 12 denying all claims of liability and wrongdoing. The settlement must be approved by the U.S. District Court in Cincinnati.
FirstGroup wasn't part of the settlement, and the class-action lawsuit against the company and fiduciaries by former and current plan participants is still pending in Berry et al. vs. FirstGroup America Inc. et al.
FirstGroup filed an objection to the settlement in the Cincinnati court Dec. 27 because the agreement's terms "unfairly prejudice" the FirstGroup defendants, the document said.
The settlement contains a provision called a bar order "that seeks to extinguish the FGA (FirstGroupAmerica) defendants' rights to bring any claims for indemnity, contribution or third-party claims against Aon, including those pursuant to the indemnification provisions in the investment management agreement to which Aon agreed when it was hired as the FGA 401(k) plan's delegated investment fiduciary," the FirstGroup petition said.
"The bar order, however, is overly broad and, as such, prejudicial to the FGA Defendants," the document said. "It extinguishes independent claims that the FGA defendants may have against Aon, and curtails the rights of the FGA defendants — who were not parties to the settlement agreement between plaintiffs and Aon to an extent unnecessary to satisfy any successful claims by plaintiffs" and members of the participant class covered by the settlement, the document said.
FirstGroup asked the court to reject the settlement or, at least, remove the language of the bar order.
The plaintiffs sued FirstGroup and Aon in May 2018.
The FirstGroup America Inc. Retirement Savings Plan, Cincinnati, had $356 million in assets as of Dec. 31, 2021, according to the latest Form 5500 filing.