The plaintiffs had claimed the plan fiduciaries had “an imprudent and disloyal preference for its own proprietary funds” — but have now come to terms.
Back in September of 2022, participant-plaintiffs Eric Goldstein, Matt Sudol, and Bonnie Zelazek, individually and as representatives of a class of similarly situated persons, and on behalf of the Mutual of America Life Insurance Company Savings Plan claimed that “at the expense of the Plan and its participants and beneficiaries, Mutual of America breached its fiduciary duties with respect to the Plan in violation of ERISA.” More specifically, the suit claimed that “by using its own proprietary recordkeeping platform and by failing to monitor or control the Plan’s administrative expenses, Mutual of America caused plan participants to pay excessive administrative fees.” The plaintiffs also claimed that Mutual of America “applied an imprudent and disloyal preference for its own proprietary funds within the Plan despite their poor performance and high costs,” and ultimately that “Mutual of America’s imprudent and disloyal conduct has cost plan participants millions of dollars over the putative class.”
The suit — the plaintiffs were represented in the action by Nichols Kaster PLLP — claimed that the 2,000 participant, $436 million plan paid annual administrative fees “roughly ten times higher than what participants would have paid for administrative services had Mutual of America diligently investigated the marketplace and hired a third-party recordkeeper to provide either the same set of services or services of superior quality.” Indeed, and while it cites only “plaintiffs’ investigation” as a reference point, the suit claims that “…a prudent and loyal fiduciary of a similarly sized plan could have obtained comparable administrative services for approximately $50-80 per participant (or less) at that time.”
The suit further alleges that “prudent fiduciaries submit requests for proposals (RFPs) to potential service providers at least every few years to obtain competitive information and survey possible alternatives.” But then went on to assert that “based on the excessive amounts the Plan paid for administrative services, it is reasonable to infer that Mutual of America failed to take these measures.”
All that said, it now (Goldstein v. Mut. of Am. Life Ins. Co., S.D.N.Y., No. 1:22-cv-07862, joint status report 3/31/23) seems that the parties have come to terms — mere months after that suit was filed, even as the defendants’ motion to dismiss the charges was still pending. More specifically, United States Magistrate Judge Ona T. Wang notes that “the parties have represented that they have reached an agreement in principle for the resolution of this case and have consented to my jurisdiction.” While at this stage the terms of that agreement have not been disclosed, Judge Wang went on to note that the plaintiffs will file an unopposed motion for preliminary approval of the settlement under Fed. R. Civ. P. 23(e) by April 14, 2023, with a hearing on that motion to take place on June 6.