Bronson hasn’t filed a formal response to the complaint. The parties in the Bronson case reached an agreement following a mediation session in November 2021, according to the settlement motion. CommonSpirit Health won early dismissal of these claims. Judges have allowed these cases to move forward against MedStar Health Inc., Zachary Holdings Inc., Prime Healthcare Services Inc., Quest Diagnostics Inc., and others. Several recent lawsuits have targeted 401(k) plans that offer the actively managed Fidelity Freedom Funds. This suite is “dramatically more expensive” than a similar suite of passively-managed Fidelity funds, and it’s “riskier in both its underlying holdings and its asset allocation strategy,” plan participants claim.
The lawsuit also takes aim at Bronson’s decision to use a suite of actively-managed target date funds from Fidelity as the plan’s default investment option. The eight-month-old lawsuit accuses Bronson of breaching its fiduciary duties under the Employee Retirement Income Security Act by failing to monitor the retirement plan’s administrative fees, which allegedly ballooned to $81 per person, per year. The $3 million settlement amount represents more than half of the retirement plan’s allegedly excessive fees and nearly one-fifth of the plaintiffs’ total estimated losses, according to the settlement motion. District Court for the Western District of Michigan, is slated to benefit about 21,528 participants in Bronson’s $737 million retirement plan.
The settlement, announced Monday in the U.S. will pay $3 million to settle a proposed class action claiming it mismanaged its retirement plan by failing to lower administrative fees or replace expensive and poorly performing investments, according to a federal court filing.
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