Yale-New Haven Hospital Inc. has agreed to pay $1 million to settle a class-action lawsuit involving the administrative fees related to its $1.7 billion hospital 403(b) retirement plan.
According to legal documents filed Nov. 17 in U.S. District Court in Hartford, Conn., the lawsuit was originally filed in January 2022 by plaintiffs Kaity Ruilova, Eileen Brannigan and others that accused the hospital and its fiduciaries of charging high record-keeping and administrative fees and offering poor-performing investments.
The plaintiffs in Ruilova et al. vs. Yale-New Haven Hospital Inc. et al. claimed the defendants violated the Employee Retirement Income Security Act of 1974 in the administration of the Yale-New Haven Hospital and Tax Exempt Affiliates Tax Sheltered Annuity Plan, New Haven, Conn., which had $1.7 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.
The suit alleged the hospital's retirement plan charged record-keeping and administrative fees of $48 per person annually, whereas other plans of a similar size paid less than $35 for such services.
In March 2023, U.S. District Court Judge Michael P. Shea dismissed some allegations in the original suit but allowed the complaints regarding record-keeping and administrative fees to go to trial.
As of Dec. 31, 2020, the plan had 26,416 participants, according to court documents.
Under the terms of the settlement, current plan participants, as well as beneficiaries or alternate payees with active accounts, will receive their settlement payments as additions to their active accounts, according to the Nov. 17 court document. Former plan participants, as well as beneficiaries or alternate payees who do not have active accounts, will receive their settlement payments in the form of rollovers to an individual retirement account or other eligible employer plan or in the form of a check.