SPRINGFIELD — Massachusetts Mutual Life Insurance Co. would admit to no wrongdoing should a federal judge approve a $30.9 million settlement in a class action lawsuit involving retirement benefits the company offers its employees.
The plaintiffs allege that the company charged excessive fees to employees who participated in the plan.
Lawyers representing both sides in the dispute signed a settlement proposal filed in U.S. District Court in Springfield on June 15. The settlement has been negotiated between the company and lawyers representing present and former MassMutal employees who participate in the retirement plan.
Presiding Justice Michael A. Ponsor on July 5 granted preliminary approval to the settlement. A hearing has been scheduled for November to determine whether the settlement should be approved, allowing time for those who might object to do so.
“MassMutual’s Thrift Plan contains unreasonably expensive and imprudent investment options. The plan’s fiduciaries caused and continue to cause the plan to pay multiples of the market rate for comparable services to institutional investors and other large ERISA retirement plans,” states the complaint, which was filed in 2013.
ERISA refers to the Employee Retirement Income Security Act of 1974, which governs private pension plans and established minimum standards.
“These funds were not selected and retained as the result of an impartial or prudent process, but were instead selected and retained by defendants as investment options in the plan because defendants benefited financially from the inclusion of these investment options,” the complaint alleges. “By choosing and then retaining these imprudent proprietary investment options, defendants enriched themselves at the expense of the plan.”
In addition to the company, defendants named in the lawsuit are MassMutual CEO Roger Crandall of Longmeadow; his predecessor, Stuart Reece; and Reece’s predecessor, Robert O’Connell.
MassMutual Thrift Plan members, who are current or former employees, that filed the lawsuit in 2013 are: Dennis Gordon of Longmeadow, John Hine of South Hadley, Ronald Lindner of West Springfield, Donna Flieger of Palm Coast, Florida, Patricia Hurley of Chicopee, Janice Reynolds of Agawam and Sharon Jewell of Springfield. They are the named plaintiffs in the class action suit representing thousands of Thrift Plan members.
According to Fortune magazine, MassMutual has more than 11,000 employees, with $266.5 billion in assets. The company, with $38.2 billion in revenue, was ranked 76th in the U.S. and 356th globally. Its headquarters are in Springfield.