MetLife Group will pay $4.5 million to settle a lawsuit by former 401(k) plan participants who accused the company and plan fiduciaries of violating ERISA by putting proprietary investments in the plan lineup when similar, cheaper and better-performing investments were available in the marketplace.
The settlement notice,which requires court approval, was filed Nov. 20 in a U.S. District Court in New York by plaintiffs' attorneys in Kohari et al. vs. MetLife Group Inc. et al.
"Although defendants dispute the allegations and deny liability for any alleged violations of ERISA or any other law, they do not oppose the relief sought in this motion," the document said.
The parties told the court in October that they had reached an agreement in principle, adding that they would file details at a later date.
The plaintiffs sued in July 2021. In October 2021, the defendants petitioned for dismissal, which was rejected by the court in August 2022.
The settlement agreement noted that the defendants in January 2022 transferred all MetLife index funds from group annuity contracts to collective investment trusts. This reduced the cost of the funds and eliminated the "excessive" group annuity contract fee, "which was the primary fee-at-issue in this case," the document said.
MetLife 401(k) Plan, Bridgewater, N.J., had $7.1 billion in assets as of Dec. 31, 2022, according to its latest Form 5500.
