Cedars-Sinai Medical Center, the Los Angeles-based healthcare organization, has agreed to pay $3 million to settle allegations that its 403(b) plan violated federal law by paying excessive fees for investments and record keeping, and by retaining poor-performing investments.
The preliminary settlement, which requires court approval, was filed April 1 in a U.S. District Court in Los Angeles by plaintiffs’ attorneys in Arevalo et al. vs. Cedars-Sinai Medical Center et al.
The proposed class-action settlement, covering about 25,000 participants, was achieved through mediation following the initial lawsuit filing in June 2023 and the refusal by a District Court judge to dismiss the complaint in March 2024.
Current and former employees alleged plan executives violated ERISA by charging record-keeping fees that were far higher than those among several other defined contribution plans and failed to offer lower-cost mutual fund shares that were available in the marketplace.
The parties reached an agreement in principle in February 2025 without identifying terms.
“Defendants support the relief sought in this motion, although they do not agree with all the averments stated in this pleading,” the settlement document said.
Cedars-Sinai Health System 403(b) Retirement Plan, Los Angeles, had $2.2 billion in assets as of Dec. 31, 2023, according to the latest Form 5500.
