Stantec Consulting Services will pay $2 million to settle a lawsuit by two former participants in a 401(k) plan who accused the company and its fiduciaries of violating ERISA, according to a settlement agreement filed Nov. 2 in a federal court in Phoenix, Ariz.
The plaintiffs alleged that the plan failed to offer lower-priced mutual funds and failed to offer collective investment trusts which they said charged less than comparable mutual funds in the case of Gotta et al. vs. Stantec Consulting Services Inc. et al.
The agreement, which requires court approval, covers participants in and beneficiaries of the plan from Sept. 14, 2014 through preliminary approval by the U.S. District Court in Phoenix.
"Throughout this litigation, defendants have denied and continue to deny the claims and contentions alleged by the defendants," the settlement document said. "Both sides agreed to the settlement to ensure a resolution and avoid the cost and risk of further litigation."
An agreement in principle was announced in October but no settlement terms were provided. The settlement was achieved through mediation.
The plaintiffs filed suit in September 2020. The defendants sought a dismissal, but Chief U.S. District Judge G. Murray Snow rejected the request in May 2021.
The Stantec 401(k) Plan, Chandler, Ariz., had $1.68 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.