A class-action lawsuit has been filed against Novant Health, alleging the healthcare provider charged excessive fees for its defined-contribution retirement plan.
The lawsuit was filed in the U.S. District Court for the Middle District of N.C. in
Approximately 25,000 Novant employees have been enrolled in the retirement plan since 2009, and since the enrollment policy decision was made, Novant's assets have more than doubled to $1.42 billion from $612 million in 2008, according to the report.
The lawsuit alleges that Novant breached its fiduciary duties by causing the retirement plan participants to pay millions of dollars in excessive record-keeping and administrative services fees to third-party service providers. The claim alleges that a brokerage company that provides the plan with limited marketing and enrollment services has been paid excessive fees up to $9.6 million in the form of commissions, and an administrative and recordkeeping provider has been paid excessive compensation of $8.6 million.
"We allege that Novant has breached its fiduciary duty under the law, a duty designed to ensure that fees charged to its employees and retirees are reasonable, that prudence is used in selecting and monitoring investment options, and that conflicts of interest and self-dealing are avoided," said Jerry Schlichter, a senior partner with Schlichter, Bogard & Denton.
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