CDI Corp., a Philadelphia-based engineering company, has agreed to pay $1.8 million to end a proposed class action claiming it violated the Employee Retirement Income Security Act by by keeping expensive, poor-performing investment options in employees' 401(k) plan.

"The benefit of the proposed settlement must be considered in the context of the risk that, in its absence, protracted litigation might lead to little or even no recovery on behalf of the proposed settlement class," the plaintiffs said in a brief supporting the settlement. In other words, the plaintiffs determined that it was better to settle now for an immediate payment rather than risk losing or diminishing the case through further litigation. 

The next step is that the judge will consider whether to grant "preliminary approval" of the settlement. If the judge grants preliminary approval, then a notice will be sent to the class members advising them that they can remain in the case and take any payment allocated to them, opt out, or object to any part of the settlement they don't like. 

The case is Crawford et al. v. CDI Corp. et al., case number 2:20-cv-03317, in the U.S. District Court for the District of Pennsylvania.

If you believe something is wrong with your 401(k)--whether it's excessive fees, poorly performing funds, or offering too many proprietary funds--contact us for a free, confidential consultation.