T. Rowe Price is putting a lawsuit over its 401(k) behind it for a price tag of $7 million, and as part of the settlement, it’s opening the plan to outside investments.
Court documents filed late last week show the financial services giant has agreed to settle the 2017 lawsuit, which alleged the company profited excessively from of its workers investments in the plan, which was composed entirely of its own products. The 401(k) included some retail share classes of mutual funds rather than institutionally priced shares or alternative investment vehicles such as collective investment trusts or separately managed accounts, according to the lawsuit. The plaintiffs claimed that plan participants paid at least $27 million more than they should have in fees, which would have allowed them to save an additional $123 million in their accounts.
The parties agreed to settle the case last year just ahead of a trial that was scheduled to begin Sept. 13. The recent court filings provide the financial details that are being made public for the first time.
