Westco Chemicals Settles Low-Yield 401(k) Suit for $500,000

June 1, 2021

California-based ingredient distributor Westco Chemicals Inc. will pay $500,000 to end a proposed class action claiming its 401(k) plan held overly conservative investments that failed to beat inflation, two plan participants told the U.S. District Court for the Central District of California.

The May 28 deal, which is expected to benefit about 50 people with money invested in Westco’s 401(k) plan, represents the majority of the plan participant’s potential damages, which they estimated to be at least $710,441, according to the settlement motion.

The lawsuit claims Westco’s decision to invest its $4.5 million 401(k) plan in certificates of deposit caused ...