In a high-stakes retirement battle, the Liberty Mutual $13.4M 401(k) suit is poised to close with a multimillion-dollar payout and sweeping changes to how the insurance giant manages employee savings plans.
Under a proposed class settlement filed in Massachusetts federal court, Liberty Mutual Group Inc. has agreed to pay $13.4 million and overhaul aspects of its 401(k) oversight process. The deal aims to resolve allegations that excessive fees and lagging investment options steadily siphoned value from workers’ retirement accounts.
From Courtroom Clash to Settlement Table
The motion for preliminary approval was submitted Tuesday by a class of roughly 50,000 employee 401(k) participants. The lawsuit, brought under the Employee Retirement Income Security Act, names Liberty Mutual and its 401(k) plan administrative committee as defendants.
The case’s procedural path was anything but brief. Employees first filed suit in 2020. They survived a motion to dismiss in 2021. In 2023, they secured class certification, allowing them to represent plan participants and beneficiaries with assets dating back to April 2014.
Momentum shifted last June when U.S. District Judge Mark G. Mastroianni partially denied Liberty Mutual’s summary judgment bid on claims tied to allegedly underperforming investment options and excessive recordkeeping costs. That ruling set the stage for negotiations, culminating in a January agreement to settle the claims.
