Detroit-based Henry Ford Health has secured preliminary approval from District Judge Sean Cox of Eastern District of Michigan to contribute $5 million to settle a class-action lawsuit by employees who alleged their retirement plans were too costly compared to other similar, lower-cost investment options.
"We are pleased to have reached a fair resolution in this case, and we look forward to providing the agreed-upon and equitable compensation to our team members who were involved," a spokesperson for Henry Ford Health said in a statement shared with Becker's.
The class-action lawsuit was originally filed by four plaintiffs on May 5, 2021, against the health system, its board of directors and its investment committee.
It alleges the health system violated the Employee Retirement Income Security Act of 1974, which sets minimum standards for the majority of private industry, voluntarily established health and retirement plans to ensure individuals' protection.
The preliminary motion for the settlement approval, obtained by Becker's, reveals that the $5 million contribution will be dispersed to the more than 27,926 individuals who were part of the lawsuit.
The health system originally agreed to pay the sum last December, when a notice of agreement was filed on Dec. 11, which required court approval, Pensions & Investments reported Dec. 15.
"The Settlement provides monetary consideration to current and former plan participants," the motion said.