Two elevator workers have asked a Pennsylvania federal court to approve a $5 million settlement in their class action lawsuit against their union’s retirement plan. The workers accused the plan’s trustees of violating the Employee Retirement Income Security Act (ERISA) by allowing excessive fees and poor investment options, which they claim drained tens of thousands of workers’ retirement savings.
Erisa Suit $5m Settlement : Settlement Agreement Reached
The plaintiffs, Bradley McLachlan and Alex Graham, filed the lawsuit in October 2022, targeting the board of trustees of the Elevator Constructors Annuity and 401(k) Retirement Plan. They alleged that the trustees failed to leverage the plan’s size—over 30,000 participants and $5.8 billion in assets—to secure lower administrative fees, which were more than three times higher than those of comparable plans. They also claimed the trustees ignored lower-cost, better-performing investment options.
After months of negotiations following an April mediation session, the parties agreed to settle. The settlement class includes all plan participants and beneficiaries from October 2016 through the date of preliminary approval. The $5 million fund will cover attorney fees, litigation costs, and compensation for the class representatives.
Erisa Suit $5m Settlement : Allocation of Funds
McLachlan and Graham have proposed that up to $1.67 million of the settlement fund be allocated to attorney fees, with a maximum of $75,000 for litigation expenses. Additionally, the plaintiffs will each request $8,000 for serving as class representatives, and an independent fiduciary overseeing the settlement is to be paid no more than $25,000.
Background of the Case
Initially, the plaintiffs also named the International Union of Elevator Constructors and its executive board as defendants, but they were dismissed from the suit in December 2022. The lawsuit, however, persisted against the trustees, alleging that participants paid excessively high fees from 2017 to 2020—over $100 per participant, compared to $20 to $30 in similar plans.
