Plaintiffs Adilson Monteiro, Karen Ginsburg, Jason Lutan, and Brian Minsk filed a class action suit on Tuesday in the District of Massachusetts both individually and as representatives of a class of similarly situated persons on behalf of the Children’s Hospital Corporation Tax-Deferred Annuity Plan. The complaint alleges that the defendants breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA) in connection with the plan.
The complaint alleges that the defendants failed to inform the plaintiffs of the expenses and risk of the plan, letting “unreasonable expenses” be charged to the plan’s participants, and approving both high-cost and poorly performing investments.
The defendants include the Children’s Hospital Corporation (Boston Children’s), the Board of Directors of the Children’s Hospital Corporation, the Children’s Hospital Corporation Retirement Committee, and other members of the Retirement Committee or Board (collectively, the defendants).
All of the plaintiffs and class members are a part of the Children’s Hospital Corporation Tax-Deferred Annuity Plan. The plan, the complaint says, consists of different investment options including mutual funds, guaranteed investment contracts, and a self-directed brokerage account. The participant-directed 403(b) plan has participants “direct the investment of their contributions into various investment options offered by the Plan.” During the class period, most of the plan’s assets were held by Fidelity Management Trust Company in a trust.
The plaintiffs highlight ERISA’s rule that plan fiduciaries should always be acting in the best interest of plan participants. Further, ERISA specifies that fiduciaries should act “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims.”
When ERISA fiduciaries fail to use attention to detail and incur fees or unreasonable costs, there can be “stark financial consequences for retirees,” the complaint said. The complaint asserts that “over time, even small differences in fees compound and can result in vast differences in the amount of a participant’s savings available at retirement.”
The complaint cites a breach of fiduciary duty, failure to monitor fiduciaries and co-fiduciary breaches, or, in the alternative, liability for knowing breach of trust. As a result of the alleged violations, the plaintiffs are seeking declaratory judgement, a permanent injunction prohibiting the defendants from engaging in future ERISA violations, equitable, legal, and remedial relief, compensatory damages, litigation fees, and any other relief deemed equitable by the Court.
The plaintiffs are represented by Bailey & Glasser.
