Pactiv Evergreen Services has agreed to pay $725,000 to settle an ERISA complaint by a former participant in a company 401(k) plan who contended that the plan's high record keeping fees violated ERISA.
The class-action settlement agreement was filed Feb. 29 in a U.S. District Court in Chicago by attorneys for the plaintiff in the case of Mazza vs. Pactiv Evergreen Services Inc. et al. Attorneys for both parties had filed an agreement in principle on Jan. 30, which was achieved through mediation, but didn't reveal the terms at the time.
Pactiv is a household products company that was spun off by Reynolds Services in November 2019. The plaintiff sued Reynolds in September 2022, but amended his complaint citing Pactiv and Pactiv plan fiduciaries as the only defendants.
The Pactiv defendants petitioned for dismissal, but U.S. District Court Judge Sara L. Ellis denied their request in May 2023. She wrote that defendants "did not regularly reassess" the plan's record-keeping and administrative fees and did not seek information from other record keepers "or perform competitive comparisons."
The settlement covers participants and beneficiaries of the plan, from Sept.16, 2016 through March 31, 2024, the settlement document said.
"Defendants take no position on this motion and do not intend to object," the document said. "However, defendants do not agree with the averments, statements, allegations and claims stated by plaintiff in this memorandum of law in support of the motion for preliminary approval of settlement."
The document quoted plaintiffs' lawyers as saying reaching an agreement was better than engaging in a prolonged court battle.
"At a minimum, continuing the litigation would have resulted in complex and costly proceedings and significantly delayed any relief to the settlement class," the document said. "ERISA cases such as this can extend up to a decade before final resolution, sometimes going through multiple appeals."
