Emeryville, Calif.-based, physician-owned Vituity has agreed to pay $8.75 million to settle a class action lawsuit alleging mismanagement of its 401(k) plan, including excessive fees and imprudent investments, according to court documents accessed by Becker’s.
What happened?
- The lawsuit, filed under the Employee Retirement Income Security Act, accused Vituity and its benefits committee of breaching their fiduciary duty by allowing high administrative fees and offering a faulty investment option — the Schwab Savings Account — as part of the MedAmerica 401(k) plan.
- The settlement, filed March 14, will benefit more than 7,000 plan participants who were covered by the Vituity 401(k) plan between November 2017 and January 2025.
- As part of the settlement, Vituity will pay $8.75 million to affected plan participants. The agreement also requires the company to remove the Schwab Savings Account from its 401(k) plan and replace it with a capital preservation fund.
- Vituity has agreed not to charge the plan for services it provides for five years following the settlement’s approval.
What’s next?
- A final approval hearing is expected to take place in mid-2025.
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