In April 2021, the U.S. District Court for the District of New Jersey denied the dismissal of an Employee Retirement Income Security Act lawsuit against Barnabas Health.
Now, a little more than a year later, the parties in the lawsuit have filed a settlement agreement that would see Barnabas Health, via its fiduciary insurer, pay $1.75 million to resolve the litigation, which involves two defined contribution retirement plans offered to employees. As stipulated in the text of the agreement, one-third of this amount may be used to cover the plaintiffs’ attorney fees.
In the original complaint, the plaintiffs alleged that the plans’ fiduciaries chose high-cost investments when lower-cost alternatives were available. They also suggested that the fiduciaries selected higher-cost share classes for funds when lower-cost share classes were available, and that there were lower-cost alternative funds available that performed better over the long-term. Finally, the lawsuit alleged that the fiduciaries failed to monitor or control the plans’ recordkeeping expenses.
In their motions to dismiss the case, the Barnabas defendants argued that the plaintiffs invested in only some of the funds cited, and that they lacked standing to press claims based on the funds in which they did not invest. The court’s prior order rejecting the defense’s dismissal motion found that the participants had sufficiently alleged an injury to their own…
