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Iron Mountain Inc., a global storage and information management firm, has agreed to settle a proposed class action alleging it imposed excessive recordkeeping fees on its $650 million 401(k) plan. Filed in Massachusetts federal court, the lawsuit argued that Iron Mountain’s mismanagement of retirement plan fees cost employees millions in potential savings.

Iron Mountain and former employees Rodney Barnett and Heather Wolff jointly informed the court Wednesday of an agreement to resolve the claims, though specific terms remain confidential. Both parties intend to finalize the settlement in coming weeks, with a motion for preliminary approval expected by Dec. 11.

Workers Claimed Excessive Fees Violated Fiduciary Duties

Barnett and Wolff filed the suit in May, accusing Iron Mountain of violating the Employee Retirement Income Security Act (ERISA) by allowing excessive fees to burden employees’ retirement accounts. According to the lawsuit, Iron Mountain charged a 220% premium for recordkeeping and administrative services, a cost that fell outside ERISA’s mandate that fiduciaries act prudently in managing retirement plans.

With assets exceeding $651 million and over 11,000 plan participants as of 2022, Barnett and Wolff argued that Iron Mountain should have leveraged the plan’s scale to negotiate better rates. Instead, they claimed, Iron Mountain failed to seek competitive bids that could have substantially lowered costs.

Iron Mountain 401(k) Fee Suit : Lawsuit Details Disparity in Recordkeeping Fees

Between 2018 and 2023, Iron Mountain’s plan participants paid an average of $105 annually in recordkeeping fees. The lawsuit highlighted a steep increase from $52 in 2018 to $185 in 2022. By contrast, plans of similar size paid between $20 and $40 per participant for equivalent recordkeeping services, the suit alleged, pointing to a significant overpayment by Iron Mountain’s employees.

Initially, Iron Mountain contracted John Hancock for recordkeeping services from 2009 until June 2022, according to court filings. After changing providers to Fidelity, the recordkeeping costs dropped to $36 per participant per year, further supporting the plaintiffs’ claim that employees had paid inflated fees for years.

Iron Mountain 401(k) Fee Suit : Legal Representation and Next Steps

Neither Iron Mountain nor the attorneys representing both sides offered comments regarding the settlement. Attorneys Paul M. Secunda from Walcheske & Luzi LLC, James A. Bloom from Schneider Wallace Cottrell Konecky Wotkyns LLP, and Jonathan M. Feigenbaum represented the workers. Iron Mountain was represented by Seyfarth Shaw LLP’s Ian H. Morrison, Thomas M. Horan, and Michael E. Steinberg.