PTC Inc., a Boston-based software products and services company, agreed to pay $1.73 million to settle a lawsuit by former participants in a company 401(k) plan who alleged ERISA violations in plan management.
The proposed settlement, filed by the plaintiffs' attorneys on Dec. 17, must be approved by a U.S. District Court judge in Boston, where the original complaint was filed in September 2020.
PTC also agreed to issue an RFP "relating to the plan's record-keeping and administrative services" within 18 months of the settlement date, according to the proposed settlement document in the case of Khan et al vs. PTC Inc. et al.
The document said the alleged ERISA violations have taken place since September 2014 and affect more than 3,800 plan participants.
The settlement agreement covers allegations that fiduciaries failed to "prudently and loyally manage the plans because ... defendants failed to, among other things, utilize the lower fee share classes that were identical in all ways except price to the funds already in the plan," the document said. The agreement also covers allegations that fiduciaries "failed to monitor or control the plan's record-keeping expenses."
The settlement document said the parties reached an agreement after participating in mediation in September.
"Defendants strongly dispute plaintiffs' allegations, maintain that the plan has been prudently managed throughout the relevant period, and deny liability for the alleged ERISA violations," the document said.
The PTC 401K Savings Plan, Boston, had assets of $742.1 million as of Dec. 31, 2020, according to the latest Form 5500.