Cerner Corp. has agreed to pay $4.05 million to settle a class action lawsuit over the way it managed its employee retirement program.
The settlement, which requires approval from a federal judge, would resolve two lawsuits filed last year that were later combined.
Both suits alleged that Cerner, the largest private employer based in Kansas City, mismanaged its 401(k) plan by choosing costly investment options and defaulting to its own stock to match employee contributions.
The lawsuits, filed by current and former employees, contended the administrators of the program failed to take advantage of Cerner’s enormous bargaining power to reduce its investment and record-keeping expenses.
As part of the settlement, Cerner has agreed to change the way it administers the plan.
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 sought to force the case into arbitration, but both sides ultimately agreed to submit 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 beyond 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 as measured by assets and participants, according to court documents.
The settlement covers all beneficiaries of Cerner’s retirement plan as of Jan. 21, 2014, or roughly 26,000 people.
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