Cerner Corp. has agreed to pay $ 4.05 million to settle a class action lawsuit about the manner in which the employee retirement program was administered.
The settlement, which requires federal judge approval, would resolve two lawsuits filed last year that were later combined.
Both lawsuits alleged that Cerner, the largest Kansas City-based private employer, had mismanaged its 401 (k) plan by choosing costly investment options and defaulting its own shares to match employee contributions.
Lawsuits filed by current and former employees alleged that the program’s administrators failed to use Cerner’s tremendous bargaining power to reduce investment and recording costs.
As part of the settlement, Cerner has agreed to change the way the plan is administered.
Cerner, a health information technology company, has more than 28,000 employees worldwide. More than 13,000 work in the Kansas City area.
Cerner had tried to force the case into arbitration, but both sides eventually agreed to bring it to a neutral third party mediator. After several hours of mediation, they agreed to the settlement according to court documents.
Kristie Welder, an attorney for the plaintiffs, said she was unable to comment on the settlement.
“We have no comment on the filing,” she said.
Cerner did not immediately return a request for comment.
Cerner’s retirement plan is among the largest in the United States in terms of assets and participants, according to court documents.
The settlement covers all beneficiaries of Cerner’s pension plan as of January 21, 2014, or approximately 26,000 people.