Former Victoria's Secret parent settles 401(k) lawsuit for $2.75 million

L Brands Inc., the former parent company of Victoria's Secret, has agreed to pay $2.75 million to settle allegations of ERISA violations in the management of the company's 401(k) plan, according to a settlement agreement filed Aug. 11 in a U.S. District Court in Columbus, Ohio.

A former participant sued the company and plan fiduciaries in November 2020, contending they charged excessive record-keeping and administrative costs, failed to offer less expensive mutual fund share classes and charged excessive total plan costs.

The defendants asked the court to dismiss the complaint in February, but the court denied the request in September 2021. One month later, the parties hired a mediator, and they reached a tentative agreement in May.

"Defendants have vigorously denied, and continue to vigorously deny, any wrongdoing and any liability from the factual allegations and claims set forth in the plaintiff's complaint," the document said.

"The parties have decided to enter into this agreement because it provides substantial and meaningful benefits" to participants, said the settlement document, which requires court approval. The settlement was made "to avoid the substantial costs, uncertainties, and risks of continued litigation," the document said.

The settlement affects participants in the plan starting Nov. 23, 2014, and extending to the date when the court will issue a preliminary approval order, the document said.

As of Dec. 31, 2020, the L Brands Inc. 401(k) Savings and Retirement Plan, Columbus, Ohio, had $1.8 billion in assets, according to the latest Form 5500.

On Aug. 2, 2021, L Brands spun off Victoria's Secret as an independent public company, trading under the symbol VSCO. Concurrent with the spinoff, L Brands changed its name to Bath & Body Works and now trades under the symbol BBWI.