Four former Cerner employees filed a class-action complaint this week against the EHR vendor for allegedly mismanaging its retirement plan by maintaining expensive investment options that cost participants millions of dollars, according to court documents obtained by Bloomberg Law.
The former employees claim that since January 2014 Cerner has failed to investigate cheaper investment options for its $2 billion 401(k) plan and offered managed funds that carried "grossly excessive fees compared with comparable or superior alternatives," according to the filing.
By failing to adequately review the investment portfolio, the plaintiffs alleged Cerner breached its responsibilities to the defined contribution retirement plan and its participants. Under the plan, both Cerner and its employees contribute and invest in funds over time while future benefits are determined by how the plan's investments perform.
"Thus, the employer has no incentive to keep costs low or to closely monitor the plan to ensure every investment remains prudent, because all risks related to high fees and poorly-performing investments are borne by the participants," the lawsuit states.
The former employees are seeking that Cerner and certain members of its board restore all financial losses to the plan that were the result of the company's mismanagement.
Cerner declined to comment per its policy on pending litigation.