Former employees of Universal Health Services Inc. have sued the hospital and health services company and its fiduciaries alleging mismanagement of the company's 401(k) plan in violation of ERISA.
"The plan had substantial bargaining power regarding the fees and expenses that were charged against participants' investments," said the lawsuit filed June 5 in a U.S. District Court in Philadelphia. "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 former employees, who are seeking class-action status for the complaint, accused fiduciaries of failing to "objectively and adequately" review the plan's investment menu as well as keeping certain investments even though there were similar or identical investments that were cheaper and better-performing.
For certain investments, they also accused the fiduciaries of failing to consider offering collective investment trusts ,which they said are cheaper than mutual funds, according to the complaint in Boley et al. vs. Universal Health Services Inc. et al.
A company representative did not respond to a request for comment.
The Universal Health Services Inc. Retirement Savings Plan, King of Prussia, Pa., had assets of $1.91 billion as of Dec. 31, 2018, according to the latest Form 5500.
