Xerox Corp. will pay $4.1 million settle a lawsuit filed by three participants in a company 401(k) plan who claimed ERISA violations due to allegedly high record-keeping fees.
The terms were announced in a preliminary settlement agreement filed Dec. 16 in a U.S. District Court in Hartford, Conn. The class-action lawsuit requires court approval.
The parties announced a tentative settlement on Oct. 14 but did not disclose terms in Carrigan et al. vs. Xerox Corp. et al.
The initial lawsuit was filed in August 2021. The participants alleged that record-keeping fees charged by Xerox HR Benefits Services and Conduent Human Resource Services were too high compared with those charged by record keepers in plans of similar size.
Xerox HR Benefits Services, a subsidiary of Xerox, was the record keeper from 2015 to 2017. Conduent Human Resource Services, which was spun off from Xerox Corp, was the record-keeper from 2017 to 2021, according to court records. Neither was a defendant.
"Defendants deny all liability to the class representatives, deny all of the claims made in the action, deny all allegations of wrongdoing made in the complaint in this action, and deny that the class representatives, the plan, or any of the plan's current or former participants suffered any losses," the settlement document stated. "Defendants further maintain that they acted prudently and loyally at all times when acting in any fiduciary capacity with respect to the plan."
The settlement was achieved because both parties wanted to avoid "the risks and uncertainty of further litigation," the document said.
The agreement also said Xerox must, within five years of final court approval of the settlement, hire an independent consultant "to assist with a request for proposal, fee benchmarking study, or other comparative analysis to ensure that the plan's record-keeping fees remain competitive." Xerox Corp. Savings Plan, Norwalk, Conn., had $4.7 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.
