Invesco Holding Co. agreed to pay $3.47 million to settle a lawsuit by participants in the company's 401(k) plan, alleging violations of ERISA by plan fiduciaries, according to documents filed Monday in a U.S. District Court in Atlanta.
The settlement of the class-action suit requires court approval. It is based on a lawsuit filed in May 2012, in which participants accused the plan executives of violating their fiduciary duties by stocking the plan with proprietary investment options and restricting investments in the plan's self-directed brokerage feature.
Defendants include several Invesco affiliates, subsidiaries and executives who manage the 401(k) plan and provided products and services to it.
Invesco filed a motion to dismiss the case in October 2018. U.S. District Judge Amy Totenberg granted the motion in September 2019, but she allowed the plaintiffs to file an amended complaint. The settlement was reached while the plaintiffs were preparing the amended complaint, according to court documents in the case of Cervantes vs. Invesco Holding Co. (U.S.) Inc. et al.
In addition to the payment, Invesco has agreed to "modify the self-directed investment account" so participants can purchase non-proprietary exchange-traded funds, the settlement document said. The document said the proposed settlement must be approved by an independent fiduciary prior to being sent to the court for final approval.
"Defendants have strenuously disputed that they did anything wrong and hotly contested the investment alternatives listed in the complaint by plaintiff," said a memorandum filed with the court by the participants in support of the proposed settlement.
The Invesco 401(k) Plan, Atlanta, had assets of $975 million as of Dec. 31, 2018, according to the latest Form 5500 filing.