Evergy settles class action lawsuit over employees’ 401(k) plan

Evergy settled a class action lawsuit in March, filed by former employees alleging the company didn't properly manage the investments offered in the company 401(k) retirement plan. (Photo by Sherman Smith/Kansas Reflector)

TOPEKA — Former Evergy employees suing the utility company for failing to properly oversee retirement investments in the company’s 401(k) plan settled their class action lawsuit in an as-yet undisclosed agreement.

Evergy spokeswoman Gina Penzig said Monday in an emailed statement to Kansas Reflector that the settlement and proposed distribution of settlement funds will be reviewed and approved by the court. 

“In order to end the significant legal cost and uncertainty of ongoing litigation, Evergy and other parties to the case reached a settlement,” she said. “Evergy maintains that the company and its representatives acted appropriately and in the best interest of the plan participants.”

In January 2025, former Evergy employees Derick Doll and Catherine Fluegel filed a lawsuit in the Western District Court of Missouri accusing Evergy of failing to manage the plan — and employee dollars —- adequately by monitoring underperforming investments. 

Joseph Nagel, another former employee, was later added to the lawsuit as a plaintiff. The lawsuit received class action status in October 2025 from presiding Missouri District Judge Stephen Bough.

“These alleged breaches and imprudent investments resulted in the loss of tens of millions of dollars for Plaintiffs and the Class,” the employee filing said. 

Named in the suit are Evergy Inc.; the administrative committee that manages the company’s 401(k) savings plan; former president and CEO Terry Bassham, who retired in 2020; current president and CEO David Campbell; and SageView Advisory Group, retirement plan consultants. 

 

The crux

The lawsuit hinged on American Century Fund Target Date Funds offered as an investment option through Evergy’s 401(k) retirement plan. Although employees can choose how to invest in the plan, those fund options are decided by plan managers, filings said. 

The American Century TDFs have been named in similar lawsuits across the country with accusations they underperformed similar funds. According to court filings, the funds held a 1.5% market share in 2016 but that dropped to 0.5% by 2024. 

American Century TDF assets dropped 40% while the overall industry saw 100% growth, court filings said.

Evergy didn’t remove those funds from its 401(k) until January 2025.

In filings, Evergy employees said the 401(k) plan falls under federal Employment Retirement Income Security Act, or ERISA, regulations, which set a “prudent person” standard. Such a standard considers whether trustees investigated merits of investments and appropriately structured them.

“A prudent fiduciary who reviewed that performance and turnover information — all of which was available to Defendants at the beginning of the Class Period — would have taken action to monitor and remove the American Century TDFs from the Plan as a result of their dramatic and sustained underperformance,” the filings said.

Turnover is how often a company buys and sells stocks. 

 

The funds

Target Date Funds are a general category of investment funds that allow retirement plan participants to invest in a single fund with a diversified portfolio that becomes more conservative as the participant approaches retirement age, the filings said.

Such a strategy bases risk on what is appropriate for someone who expects to retire within a year of the fund’s target date, the filing said. Matching funds Evergy put into the 401(k) — a program to match dollars employees were investing up to a certain level — were automatically invested into American Century TDFs unless otherwise directed by employees, the filing said. 

The American Century TDFs consistently held more than 33% of the plan assets throughout the period addressed in the class action, which is from 2019 until a judgement is rendered. 

 

Opposing viewpoint

In a response filed by SageView on behalf of the defendants, SageView disagreed with most points the employee filings made but offered little explanation or information about why the company didn’t violate its oversight duties. They also contended the case should not meet class action status. 

In his Oct. 14, 2025, ruling, Bough determined the case met four crucial factors to be ruled a class action, including hundreds of affected people with similar complaints. 

The class action includes any former or current Evergy employees who invested in the American Century funds during the class action time period.