A participant in a 403(b) plan offered by the University of Vermont Medical Center sued the medical facility and fiduciaries alleging ERISA violations related to fees for investment management and record keeping.
"The plan had substantial bargaining power regarding the fees and expenses that were charged against participants' investments," said the complaint filed May 10 in a U.S. District Court in Rutland, Vt.
However, the defendants "failed to exercise appropriate judgment and permitted the Plan's service providers to charge excessive administrative fees and expenses," said the complaint in Baker vs. The University of Vermont Medical Center Inc. et al. The plaintiff is seeking class-action status.
"We are confident that our retirement plan has been managed in the best interests of our employees and other plan participants and beneficiaries, and always in compliance with federal law," said Annie Mackin, a spokeswoman for University of Vermont Health Network, the parent of the medical center, in an email.
"While we have not been served with a lawsuit at this time, we will review any allegations we may receive and will demonstrate that our retirement plan has been prudently managed," Ms. Mackin added.
The plaintiff alleged that the defendants violated ERISA's rule of prudence in managing investments. "If defendants had managed the plan in a prudent manner, they would have mapped outdated, legacy investment options (which were more expensive than comparable investments offered by the plan) to less expensive comparable investment options offered by the plan," the lawsuit said.
The plaintiff also accused plan executives of failing to follow "fiduciary best practices to control plan costs and compensation paid" to the plan's record keeper, adding that per-participant administrative and record-keeping fees "were unreasonable when compared to similar 403(b) plans."
University of Vermont Medical Center 403(b) Plan, Burlington, Vt., had $1.8 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.
