Southcoast Hospitals Group Inc., New Bedford, Mass., agreed to a $2 million settlement with 403(b) plan participants who had sued the non-profit health system, its board of directors and investment committee, alleging breaches of their ERISA fiduciary duties.
Four 403(b) plan participants originally filed the class-action lawsuit in U.S. District Court in Boston in December 2020, alleging the system breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 by failing to properly monitor plan fees, using funds in its investment options lineup with high fees when similar, better performing funds were available, and not offering the lowest-fee share classes available to the plan, according to the original court filing.
According to documents filed in a motion to approve the settlement, the agreement represents a total of about 45% of the total estimated likely damages of $4.4 million resulting from plaintiffs' allegations.
"Southcoast Health has agreed to a settlement in connection with a lawsuit alleging ERISA claims regarding Southcoast's retirement plan," Kaitlyn Cox, Southcoast spokeswoman, said in an email. "Southcoast denies all of the claims in the lawsuit, which is one of many nearly identical cases brought against retirement plans by a few plaintiff's law firms.
"Southcoast believes it has acted prudently and in the best interests of the plan's participants in selecting and monitoring the plan's investment options and fees."
As of Dec. 31, the Southcoast Health System Partnership Plan had $972 million in assets, according to its most recent Form 5500 filing.
Mark K. Gyandoh, partner at Capozzi Adler, attorney for the participants, could not be immediately reached for comment.