Current and former participants in 401(k) plans offered by Mercy Health Corp. sued the operator of hospitals and clinics and its fiduciaries for ERISA violations.
"Defendants failed to employ a prudent process for managing the plans and failed to prudently monitor and control the plans' fees," said the complaint filed Tuesday in U.S. District Court in Rockford, Ill.
"Instead, defendants allowed the plans to pay excessive sales commissions on investment products and services.
The two plaintiffs, who are seeking class-action status, also argued that the defendants "failed to monitor the performance of certain investment funds held by the plans," said the complaint in the case of Hill et al. vs. Mercy Health Corp. et al.
These funds "have consistently underperformed their benchmark indexes, and the investment marketplace for similarly sized plans is replete with lower cost, better performing funds," the complaint said.
The plaintiffs wrote that they are suing on behalf of current and former participants in three retirement plans that have been merged or consolidated under the Mercy Health umbrella. The plans had aggregate assets of $613 million by year-end 2018, according to the complaint.
A company representative did not return a request for comment.