Parties in a lawsuit filed on behalf of participants in the Mercy Health Corp. Employees’ Retirement Plan, the Rockford Health System Retirement Plan and the Rockford Health Physicians Retirement Plan have agreed to settle the case.
Mercy Health Corp. and the other defendants have agreed to pay $3.9 million to a settlement fund to resolve the claims in the suit. In addition, they have agreed that for three years following the settlement effective date, they will retain one or more independent consultants, who are not existing investment or service providers or affiliated with the plans, to provide ongoing assistance in reviewing the investment options in the plans, the fees for those investment options and any brokerage fees incurred by the plans.
In August 2020, plaintiffs filed two separate claims against Mercy Health Corp. and other plan fiduciaries. The plaintiff in one of the lawsuits, who was suing on behalf of the Mercy Health 403(b) plan, voluntarily dismissed her claims and joined the plaintiffs in a lawsuit that was filed on behalf of all three plans days before hers. Last November, an amended complaint was filed in the U.S. District Court for the Northern District of Illinois, adding the third plaintiff to the lawsuit.
The lawsuit accused fiduciaries of the three plans of violating their Employee Retirement Income Security Act (ERISA) fiduciary duties by failing to monitor and control the fees paid by the plans and by failing to monitor the investment performance of certain funds. The plaintiffs said the defendants’ actions and omissions caused millions of dollars in losses to the plans.
In the settlement agreement, the defendants deny all liability to the plaintiffs and the plans and deny all allegations of wrongdoing. They also “deny that the class representatives, the plans or any of the plans’ current or former participants suffered any losses.”