Sutter Health has agreed to settle for $4 million a long-running legal battle involving the health care company and current and former employees who alleged Sutter Health’s 403(b) plan charged high costs and retained poor-performing investments.
The settlement document, which requires court approval, was filed March 13 by plaintiffs’ attorneys in a U.S. District Court in Fresno, Calif.
The agreement was achieved through mediation. It covers participants and beneficiaries from July 21, 2014, through the court’s preliminary approval of the deal.
The plaintiffs sued in July 2020, later amending their complaint in the case of In re Sutter Health ERISA Litigation. A federal judge in Fresno rejected Sutter Health’s motion to dismiss in February 2023.
“Defendant does not oppose the relief sought herein or preliminary approval of the settlement,” the document said. “However, defendant specifically denies any liability or wrongdoing.”
Sutter Health, an operator of hospitals and clinics, has agreed to the settlement “to eliminate the burden and expense of further litigation,” the document said.
The plaintiffs accused Sutter and its plan fiduciaries of violating ERISA by failing to appropriately monitor the plan’s investments and by allowing “unreasonable” fees for record keeping and administration.
The Sutter Health 403(b) Savings Plan, Sacramento, California, had assets of $6.5 billion as of Dec. 31, 2023, according to the latest Form 5500.
