Columbus Regional Retirement Plan Fiduciary Duties Class Action

When Columbus Regional Healthcare System, Inc. was acquired by Piedmont Healthcare, Inc. in 2018, its 403(b) retirement plan was terminated. The complaint for this class action alleges that Columbus mishandled this former retirement plan, breaching its fiduciary duties, violating the Employee Retirement Income Security Act (ERISA), and costing participants money.

The class for this action is all participants and beneficiaries of the Piedmont Columbus Regional Retirement Plan, formerly with the Columbus Regional Healthcare System Retirement Plan between February 1, 2015 and the date of judgment in this case.

Early on, the complaint makes a startling statement: “The United States Department of Labor, which oversees ERISA, estimates that over thirty-five years, a 1% increase in fees and expenses can reduce a participant’s account balance by 28%.”

At the time it was terminated, the Columbus Regional plan had $183 million in assets and 4,700 participants with account balances.

Fiduciaries have duties of prudence and loyalty. The complaint says, “As the statutory plan sponsor and administrator, and named fiduciary of the Plan, Columbus Regional had the fiduciary duty to manage the Plan prudently and not waste participants’ money.” The company did not fulfill those duties, the complaint says, and makes a number of allegations:

  • That it did not select the investment options prudently and did not monitor the investment options after they were selected.
  • That it chose and maintained investment options with “unjustifiably high management fees[.]”
  • That it did not monitor or prudently manage administrative expenses for the plan.
  • That it caused the plan to perform one or more transactions with a party-in-interest that are prohibited under ERISA.
  • That it did not properly disclose to the plan participants the information they needed to make fully-informed decisions—for example, information about the high fees being charged to their individual accounts.

The long complaint details ways in which Columbus did the above, such selecting more costly share classes in investments, pursuing an active-management strategy while ignoring index funds, and hiding the real costs of investments with revenue sharing. As to prohibited transactions, the complaint explains this in connection with Transamerica’s entering into agreements for recordkeeping as well as other services.

The complaint claims that “Columbus Regional either failed to do even minimal due diligence or, worse, simply ignored readily available information. As a result, Columbus Regional stocked the plan with overpriced and underperforming funds, needlessly wasting participants’ money.”

The complaint estimates that during the approximately four and a half years covered by this complaint, participants lost roughly $4.6 million due to excessive fees and costs.

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Columbus Regional Retirement Plan Fiduciary Duties Complaint

February 2, 2021

When Columbus Regional Healthcare System, Inc. was acquired by Piedmont Healthcare, Inc. in 2018, its 403(b) retirement plan was terminated. The complaint for this class action alleges that Columbus mishandled this former retirement plan, breaching its fiduciary duties, violating the Employee Retirement Income Security Act (ERISA), and costing participants money.

Columbus Regional Retirement Plan Fiduciary Duties Complaint

Case Event History

Columbus Regional Retirement Plan Fiduciary Duties Complaint

February 2, 2021

When Columbus Regional Healthcare System, Inc. was acquired by Piedmont Healthcare, Inc. in 2018, its 403(b) retirement plan was terminated. The complaint for this class action alleges that Columbus mishandled this former retirement plan, breaching its fiduciary duties, violating the Employee Retirement Income Security Act (ERISA), and costing participants money.

Columbus Regional Retirement Plan Fiduciary Duties Complaint
Tags: Breach of Fiduciary Duty, ERISA Violations, Employment Violations, Retirement Plans