Massachusetts Financial Services Co. agreed to settle a class action by employees challenging the affiliated mutual funds in their 401(k) plans.

The lawsuit accuses MFS of mismanaging the plans, which together hold more than $500 million, by offering high-cost funds affiliated with the company and by failing to investigate lower-fee options.

More than 99 percent of the plans’ assets were held in MFS-affiliated funds that earned money for the company and reduced workers’ retirement savings by tens of millions of…

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