MedStar Health Inc. will pay $11.8 million to settle a lawsuit accusing the company and its fiduciaries of violating ERISA by mismanaging a 403(b) plan, according to a settlement document filed Jan. 19 in a U.S. District Court in Baltimore.
The document was filed by lawyers representing plan participants in the case In re MedStar ERISA litigation, reflecting the consolidation of two similar lawsuits.
The class-action settlement, which requires court approval, was unopposed by the defendants, the document said. The settlement was achieved through mediation. A trial had been scheduled to begin in February.
MedStar announced an agreement in principle in December 2023, but didn't reveal terms at that time.
The defendants were sued in July 2020 and August 2020, and a motion to dismiss was rejected by a federal district court judge in February 2021.
The plaintiffs accused the MedStar defendants of failing to monitor investment expenses, offering "exceedingly expensive" investments, failing to remove "imprudent" investments and charging high investment management fees.
MedStar Health Inc. Retirement Savings Plan, Columbia, Md., had $2.4 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.
