Four former employees of Boston Children's Hospital are suing the organization over allegations including that it did not fully disclose the expenses associated with its $1.1 billion retirement plan, according to court documents obtained by Becker's.
The class-action complaint, filed in the U.S. District Court for the District of Massachusetts, alleges that Boston Children's breached its fiduciary duties related to the retirement plan and violated the Employee Retirement Income Security Act. It accuses the hospital of overcharging 18,580 participants in the plan with annual fees between $57 and $93.
The retirement plan is a 403(b), and participants invest in options that are offered by the plan. The plan pays for expenses from assets in the plan, while most of the administrative expenses are paid for by the participants. Failure to monitor fees and costs can provide challenges for retirees as the expenses add up over time and reduce the value of investments.
According to the complaint, Boston Children's allegedly let participants be charged "unreasonable" expenses; chose, maintained and ratified expensive and badly performing investments rather than provide better investment opportunities; and did not completely disclose to participants the expenses and risks of the retirement plan's investment options.
The plaintiffs are seeking declaratory judgment that Boston Children's violated ERISA, an order blocking the hospital from continuing its alleged actions and compensation for the alleged losses, among other relief.
Boston Children's did not return a request for comment by the time of publication.