Aurora Health Care Inc. has reached a settlement in principle with a former employee who alleged its 403(b) plan charged excessive fees for record keeping, investment options and managed account services.
In a joint status report filed in U.S. District Court in Milwaukee on Sept. 16, the company and plaintiff Linda A. Woznicki informed the court that the parties reached a settlement in principle after two weeks of negotiations before a private mediator.
The parties will continue to negotiate the terms of a class-action settlement before Ms. Woznicki files a motion for preliminary approval no later than Oct. 24, according to the joint status report in the case of Linda A. Woznicki vs. Aurora Health Care Inc. et al.
The filing did not provide any further information on the terms of the potential settlement.
Ms. Woznicki filed the lawsuit in August 2020 and has been seeking class-action status. U.S. District Court Judge Brett H. Ludwig rebuffed a request in May by Aurora to dismiss the ERISA complaint.
"Because Woznicki has plausibly alleged breaches of the duty of prudence and duty to monitor other fiduciaries, defendants' motion will be denied with respect to those claims," Mr. Ludwig wrote on May 27.
At the time, however, Mr. Ludwig had supported Aurora's request to dismiss an allegation that fiduciaries breached their ERISA-based duty of loyalty. Because the plaintiff didn't allege self-dealing by the defendants, the judge dismissed this complaint.
He also dismissed the allegation that defendants failed to disclose revenue-sharing rates and managed account service fees that prevented participants from "making sound and informed investment decisions." The fiduciaries made sufficient public disclosures, the judge wrote.
As of Dec. 31, 2019, the Aurora Health Care Inc. Incentive Savings Plan, Milwaukee, had $3.6 billion in assets, according to its 2020 Form 5500 filing. In March 2020, Aurora Health Care's board of directors voted to terminate the plan and distributed all assets to participants by April 1, 2021, according to the plan's 2021 Form 5500 filing.