March 26, 2015 – Ameriprise Financial has agreed to settle a closely watched Employee Retirement Income Security Act (ERISA) suit, Krueger v. Ameriprise Financial, for $27.5 million in plan reimbursements and remedies.
The settlement also includes non-monetary benefits for 401(k) plan employees, according to plaintiffs’ attorney Jerry Schlichter, managing partner of the St. Louis-based firm Schlichter Bogard and Denton. He says the non-monetary relief obtained, in addition to the financial terms, “not only significantly benefits Ameriprise’s employees and retirees but also sets a standard for best practices for plan sponsors.”
A joint motion for approval of the settlement was filed by the parties in the court of Judge Susan Richard Nelson of the U.S. District Court for the District of Minnesota, who must approve the settlement.
In a complaint originally filed on September 28, 2011, the plaintiffs alleged that Ameriprise failed to ensure that the recordkeeping and management fees and expenses paid out of the assets in its defined contribution 401(k) plan were reasonable. They alleged that the plan’s fiduciaries breached their duties of prudence and loyalty in selecting and retaining proprietary investment options. Further, it was alleged they engaged in prohibited transactions by receiving compensation from the plan as a result of those decisions in order to benefit its subsidiary Columbia Management Investment Advisers, LLC.
Ameriprise denied all of the allegations, contended that the fees were reasonable and contended it complied in all respects with the law and did not commit any fiduciary breaches. In the settlement, Ameriprise has agreed to terms designed to strengthen and add value to its 401(k) plan as part of the non-monetary relief, Schlichter says. The settlement period will be three years during which the Minnesota court will retain jurisdiction.
An estimated 24,000 current and former Ameriprise employees will benefit from the settlement, Schlichter says.
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