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Nov. 12 — Novant Health Inc. has reached a $32 million settlement with its employees who alleged the company's retirement plan committee breached fiduciary duties by overpaying millions of dollars in fees.
The settlement, filed Nov. 9 in the U.S. District Court for the Middle District of North Carolina, still must receive court approval.
The settlement comes less than two months after Judge William Osteen Jr. found that the retirement savings plan participants sufficiently stated a claim for relief under the Employee Retirement Income Security Act by alleging that Novant breached its fiduciary duties by only offering retail class shares of mutual funds even though less expensive institutional shares that provide the same return on investment were available (182 DLR A-4, 9/21/15).
The participants argued in their lawsuit that the plan has a very large pool of assets and plans of such size have the ability to obtain less costly institutional class shares of mutual funds. They asserted that Novant and the plan committee breached their fiduciary duties by offering only the more expensive retail class shares to participants, even though less expensive institutional class shares of the same funds were available.
According to the settlement papers, the settlement class includes all current and former participants and beneficiaries who participated in Novant's retirement plans between Oct. 1, 1998, and Sept. 30, 2015.
A similar settlement recently was reached in a lawsuit against Boeing Co. (214 DLR A-3, 11/5/15). The lawsuit against Boeing—which still awaits court approval—settled for $57 million.
Schlichter Bogard & Denton represented the Novant employees, as well as the Boeing employees. Novant was represented by Morgan Lewis & Bockius.
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