PNC Financial Services Group Inc. has agreed to pay $6.1 million to settle an ERISA complaint by current and former participants in a 401(k) plan, according to a document filed Sept. 19 in a U.S. District Court in Birmingham, Ala.
PNC is the successor to the original defendant — BBVA Compass Bancshares — which was sued in July 2019 by plaintiffs who alleged the bank and its fiduciaries violated ERISA by offering high-cost investments when similar lower-cost ones were available and for offering a money market fund instead of another capital preservation investment with higher returns.
BBVA Compass unsuccessfully tried twice to have the complaint dismissed by a federal judge in Birmingham, Ala.
PNC completed its acquisition of BBVA in June 2022. The BBVA 401(k) plan was terminated in October 2021, and "certain participants in the plan became participants" in a PNC 401(k) plan, according to the settlement agreement.
The parties met several times with a mediator in 2022, which didn't lead to an agreement. They resumed talks in July 2023, leading to an agreement in principle in August 2023 in the case of Ferguson et al. vs. PNC Financial Services Group Inc. The settlement document requires court approval.
"Defendant vigorously denies every allegation of wrongdoing made in the complaints and contends that it has no liability in the action," the document said.
"When the benefits conferred by the settlement are weighed against the attendant risks of continuing prosecution of the action, plaintiffs' counsel believe that the settlement represents a reasonable and fair resolution of the claims of the settlement class," the document said.
The PNC Financial Services Group Inc. Incentive Savings Plan, Pittsburgh, Pa., had assets of $9.92 billion as of Dec. 31, 2021, according to the latest Form 5500.
