From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...
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.
To contact the reporter on this story: Jacklyn Wille in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
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.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)