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Wake Forest Baptist Health Settles 403(b) Suit for $3.8M
The plaintiffs filed an unopposed settlement after “hard-fought” negotiations.
The plaintiffs in a lawsuit against the 403(b) managers for Atrium Health Wake Forest Baptist, previously known as the Wake Forest University Baptist Medical Center, have reached a tentative settlement for $3.8 million, according to a U.S. District Court filing on Monday.
After “arm’s length negotiations and numerous exchanges of memoranda and discovery,” the parties reached an unopposed motion to approve the payment to the participant class, according to the filing in Garnick et al. v. Wake Forest University Baptist Medical Center et al in the Middle District of North Carolina. Wake Forest’s 403(b) plan had $3 billion in assets and 31,258 participants at the end of 2021, according to its Form 5500.
The original complaint was filed in June 2021, alleging fiduciary negligence against the Winston-Salem, North Carolina-based medical center’s retirement benefit committee and board of directors.
The plaintiffs, represented by law firm Capozzi Adler PC, alleged that many of the mutual funds in the retirement plan were more expensive than comparable funds found in similar-sized plans. The complaint also alleged that the plan fees were excessive, given that comparably sized plans have “substantial” bargaining power with recordkeepers.
The defendants had sought to dismiss the plaintiffs’ claims on the grounds of failure to state a claim and failure to state a claim upon which relief can be granted, according to court documents.
In a September 2022 decision, U.S. District Judge William Lindsay Osteen Jr., allowed the lawsuit to proceed, finding that plaintiffs “should be afforded an opportunity to conduct discovery.”
After what the plaintiffs’ attorneys called “a year and a half of hard-fought litigation,” including a third-party mediator, the parties reached the proposed settlement. Attorneys’ fees are capped at one-third of the settlement total, according to the filing.
Atrium Health Wake Forest Baptist did not respond to a request for comment about the proposed settlement.
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