MADISON, Wis. — A federal judge has granted final approval to a $570,000 class-action settlement resolving claims that the Credit Union Retirement Plan Association and others allowed participants in a credit union industry 401(k) plan to pay excessive administrative fees.
U.S. District Judge James D. Peterson of the Western District of Wisconsin approved the settlement Aug. 28 after requiring the parties to revise how the money would be distributed among class members to account for a reduction in plan fees that took effect in 2021, according to court records and information provided by Bloomberg Law. The final approval order was filed in the case Aug. 28.
The settlement is expected to benefit approximately 1,000 people who participated in the Credit Union Retirement Association 401(k) Plan through Firefighters Credit Union and California Coast Credit Union.
Lawsuit Filed in 2022
The lawsuit, filed in 2022 by Brenda Lucero, Gloria Romero and Linda Aramburu, alleged violations of the Employee Retirement Income Security Act, or ERISA, involving fees charged to participants in the retirement plan.
Defendants included the Credit Union Retirement Plan Association; the plan’s board of directors and board of trustees; CUNA Mutual Group; and several individuals.
Judge Had Raised Concerns Over Distribution
Peterson previously declined to approve the settlement as initially structured because of concerns about whether its allocation formula fairly reflected differences in the fees paid by participants over time.
The revised agreement differentiates among class members to recognize that plan fees declined in 2021, according to Bloomberg Law.
That change means participants’ recoveries will more closely reflect the fee levels that applied during the periods in which they participated in the plan.
Under the settlement, the class includes people who participated in the plan through Firefighters Credit Union from April 13, 2016, through Aug. 31, 2022, and those who participated through California Coast Credit Union from April 13, 2016, through Dec. 30, 2026, according to Peterson’s final order.
The settlement also includes people with accounts in the plan as of the applicable dates who previously participated through those credit unions.
The court found that the settlement satisfied requirements governing class-action agreements and approved both the settlement and its plan for allocating the proceeds.
Settlement Resolves ERISA Claims
The agreement resolves the class members’ claims against the defendants without requiring the litigation to proceed to trial.
Peterson’s order states that class members who did not exclude themselves from the settlement are bound by the agreement and its release of claims.
The court retained jurisdiction over implementation and enforcement of the settlement. The case is Lucero et al. v. Credit Union Retirement Plan Association et al., No. 3:22-cv-00208, in the U.S. District Court for the Western District of Wisconsin.
