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Minnesota health-care system Essentia Health is accused in a new lawsuit of failing to monitor the allegedly excessive record-keeping fees charged through its workers’ retirement plans ( Morin v. Essentia Health , D. Minn., No. 0:16-cv-04397, complaint filed 12/29/16 ).
The proposed class action, filed Dec. 29 by seven participants in Essentia’s two retirement plans, claims that the nonprofit corporation overpaid for administrative services by using two record keepers—BMO Harris and Lincoln National Corp.—when one would have sufficed. The plans continued to pay excessive fees after being streamlined in 2012, the lawsuit claims, with annual record-keeping fees rising even as industry averages trended lower.
Lawsuits over retirement plan fees have come at a rapid-fire pace in the past year, with recent lawsuits targeting Anthem Inc., Starwood Hotels & Resorts, Northrop Grumman Corp., Fujitsu Technology, American Airlines Inc., Banner Health and Chevron Corp., the latter of which won dismissal in August.
This latest lawsuit against Essentia is noteworthy for involving a 403(b) plan, which is geared toward employees of nonprofit institutions. This strategy was uncommon before August, when a series of 12 lawsuits attacked the 403(b) plans of prominent colleges like Yale, New York University, Duke and Vanderbilt.
Unlike many lawsuits over retirement plan fees, the Essentia plan participants don’t challenge the fees associated with any specific plan investment options.
Essentia’s two retirement plans cover about 20,000 participants and hold about $1 billion in assets. The lawsuit claims that Essentia should have used this large plan size as leverage for obtaining lower fees from its service providers.
A spokeswoman for Essentia declined Bloomberg BNA’s request to comment on the lawsuit, saying that the company hadn’t been served with the complaint.
The lawsuit was filed in the U.S. District Court for the District of Minnesota by Madia Law LLC and Nichols Kaster PLLP. In recent months, Nichols Kaster has been active in the world of retirement plan fee litigation, with pending lawsuits against BB&T Bank, Allianz Asset Management, Putnam Investments LLC, Deutsche Bank, M&T Bank, American Century Services and New York Life Insurance Co.
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Text of the complaint is at http://www.bloomberglaw.com/public/document/Morin_et_al_v_Essentia_Health_et_al_Docket_No_016cv04397_D_Minn_D.
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