Wesco Distribution Inc. has agreed to pay $2.25 million to 401(k) plan participants who accused the company and its fiduciaries of violating federal law by allowing excessive record-keeping fees and retaining unnecessarily expensive mutual fund share classes.
In addition to the money, Wesco agreed to make a series of plan management improvements: annual fiduciary training for all members of the plan’s benefits fiduciary committee; evaluating the investment policy statement annually for three years; and issuing an RFP for record-keeping services within three years of the settlement’s final approval.
The proposed class-action settlement was filed Jan. 24 in a U.S. District Court in Pittsburgh by plaintiffs’ attorneys who said the agreement was unopposed by defendants in Mator et al. vs. Wesco Distribution et al. Plaintiffs alleged plan managers violated their fiduciary duties as outlined in ERISA.
Five days after the notice was filed, U.S. District Judge Marilyn J. Horan gave preliminary approval, setting June 18 for a fairness hearing, the final step in signing off on the deal.
A settlement would conclude litigation that started in March 2021 for which the judge dismissed the original complaint and amended complaints three times.
The August 2022 dismissal was issued with prejudice, meaning the plaintiffs couldn’t refile. Plaintiffs appealed to the 3rd U.S. Circuit Court of Appeals, Philadelphia, which vacated the judgment in May 2024 and sent the case back to the District Court.
The parties subsequently agreed to mediation, leading to the proposed settlement.
The plaintiffs support the agreement because “the litigation would be protracted and expensive, to say nothing of the inherent risks and uncertain outcomes attendant to each step along the way,” the settlement document said.
The agreement “provides immediate and significant benefits to class members,” the document said. The settlement covers participants and beneficiaries from March 26, 2015, through the date of preliminary approval.
Wesco distributes, among other things, electrical and industrial supplies, power distribution equipment, lighting and lighting control systems and safety products.
Wesco Distribution Inc. Retirement Savings Plan, Pittsburgh, had $1.7 billion in assets as of Dec. 31, 2023, according to the company's latest Form 5500.
