Huntington Bancshares Inc. agreed to pay $10.5 million to settle an ERISA complaint by former participants in a company 401(k) plan who alleged ERISA violations by the plan's fiduciaries.
The plaintiffs argued that plan executives violated their ERISA duties "by selecting and retaining Huntington-managed investment for the plan that were costlier and performed worse than non-proprietary alternatives," said the settlement document, filed Aug. 7 in a U.S. District Court in Columbus, Ohio.
The plaintiffs sued the company and its fiduciaries in December 2017. The district court dismissed one allegation against the defendants in September 2019 but allowed another allegation — breach of fiduciary duty — to proceed to trial.
After the parties completed pre-trial discovery, they submitted information to a mediator and subsequently reached a preliminary agreement, which requires court approval, according to the settlement document in the case of Karpik et al. vs. Huntington Bancshares Inc. et al.
"Plaintiffs claim, among other things, that Huntington should not have selected and maintained certain Huntington funds as investment options in the plan, and should not have allowed the plan to pay higher record-keeping and administrative fees than necessary to the plan's recordkeepers," the settlement document said. "Huntington denies all of the allegations in the lawsuit and contends that its conduct was entirely proper."
The parties agreed to settle to "avoid the costs and risks of further litigation," the document said. "The court has not made any finding that Huntington has done anything wrong or violated any law or regulation."
The Huntington 401(k) Plan, formerly known as the Huntington Investment and Tax Savings Plan, had assets of $982.8 million as of Dec. 31, 2018, according to the latest Form 5500.