Prudential Will Pay $9M To Settle ERISA Class Action Lawsuit

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A $9 million settlement has been reached that would resolve a Prudential class action lawsuit involving more than 6,000 individuals who had issues with the life insurance payouts provided by Prudential.

While Prudential still denies the claims in the underlying lawsuit, they agreed to the $9 million class action settlement deal brought under the Employee Retirement Income Security Act.

The beneficiaries in the Prudential ERISA class action suit received subclass certification in January, but the case has been going on for eight years.

A total of 6,086 Class Members could be entitled to some of the funds under the Prudential settlement.

The average payout for a Class Member in the Prudential ERISA lawsuit will be higher than $900, but the final numbers will vary.

The Class Members intend to petition for expenses, costs, and attorneys’ fees for their end of the lawsuit and additional benefits for the named plaintiffs.

A January decision giving subclass certification paved the way for the settlement, according to those closely involved in the Prudential ERISA class action lawsuit. Prudential attempted to appeal that decision after it came down.

Previously, the judge denied three different requests to certify Classes in the class action lawsuit. Other claims were shut down due to the communications between the beneficiaries and the insurance company about the use of the accounts.

The Prudential ERISA class action lawsuit claims that the plans provided to employees by the life insurance carrier advertised that the funds were paid in a lump sum.

The plaintiffs in the Prudential ERISA class action, however, received access to the funds inside an account that enabled Prudential to earn interest on the funds that were not yet tapped by the beneficiaries.

The Prudential ERISA class action lawsuit plaintiffs are those entitled to receive funds as beneficiaries under those plans.

The employees who received those life insurance policies worked at Con-Way and JPMorgan Bank who opted in to the company’s offer of a life insurance product.

Plaintiffs in the Prudential ERISA class action claim that they thought they’d be getting a lump sum payment and that this feature was a major reason why the owners of the policies, now-deceased family members, chose to get the policy in the first place.

These plaintiffs argued that the company was trying to get them to use a feature called Alliance Accounts instead so that Prudential could reap additional revenue from the interest on the remaining money in the account.

The beneficiaries in the Prudential class action say that this violated ERISA and that they should have been able to get the funds in a lump sum as was advertised.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The beneficiaries are represented by John C. Bell Jr. and Lee W. Brigham of Bell & Brigham, Cary L. Flitter and Andrew M. Milz of Flitter Milz PC, M. Scott Barrett of Barrett Wylie LLC, and Stuart T. Rossman of the National Consumer Law Center.

The Prudential ERISA Class Action Lawsuit is Huffman, et al. v. The Prudential Insurance Co. of America, Case No. 2:10-cv-05135, in the U.S. District Court for the Eastern District of Pennsylvania.