Participants in a $1 billion defined contribution plan provided by Ardent Health Services Management Co. filed a class-action lawsuit, alleging the firm mismanaged the plan in violation of ERISA.
The suit, filed in federal court in Nashville on Dec. 24 by lead plaintiffs Mark McCool, Shawn MacDonald and Warren Harlan, allege that beginning Dec. 24, 2013, Ardent and other fiduciaries of the Ardent Health Services Retirement Savings Plan failed to adequately review each investment option within the plan.
The defendants also continued to maintain certain funds within the plan "despite the availability of identical or similar investment options with lower costs and/or better performance histories," the suit contends.
"The plan had substantial bargaining power regarding the fees and expenses that were charged against participants' investments," the suit says. "Defendants, however, did not try to reduce the plan's expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the plan to ensure it was prudent."
The suit also alleges that the plan's fiduciaries failed to use "the lowest cost share class for many of the mutual funds within the plan," and "failed to consider collective trusts, commingled accounts, or separate accounts as alternatives to the mutual funds in the plan, despite their lower fees."
Plaintiffs are demanding a jury trial.
Ardent Health Services spokeswoman Tyra Palmer could not be immediately reached for comment.