On Tuesday, a class action lawsuit was filed in the US against Memorial Hermann Health System for mishandling two retirement plans that cover tens of thousands of people. The complaint alleges that Memorial Hermann overpaid for administrative services and offered poorly performing target date funds, charging approximately $40 per person in annual fees when a reasonable fee would be closer to $17 per person.
The lawsuit claims that the retirement plans, which hold over $2.5 billion, failed to take appropriate action to negotiate lower fees or look for less expensive service providers. Four former employees filed the lawsuit and are seeking accountability for Memorial Hermann’s mismanagement of the retirement plans, which have had a significant impact on employees and retirees.
This case serves as a reminder to employers to regularly review retirement plan fees and services to ensure they are in the best interest of plan participants. The importance of managing retirement plans effectively cannot be overstated as it ensures that participants are not being overcharged for administrative services and are provided with investment options that perform well. Transparency and accountability are key factors in managing retirement plans to protect the financial well-being of employees and retirees.
In conclusion, this lawsuit highlights the need for transparency and accountability in managing retirement plans. It is crucial for employers to review their plan fees and services regularly to ensure they are providing their participants with fair pricing and quality investment options. By doing so, employers can help secure the financial well-being of their employees and retirees while also avoiding costly legal battles like this one.
