Mercy Health Agrees To $4M Deal in Retirement Fund Fight

The parties in Hill v. Mercy Health Corp. (N.D. Ill.) reached a settlement agreement in a case where the plaintiffs accused the defendants of mishandling their retirement savings. Parties in the class action lawsuit reported that the parties have reached a $3.9 million settlement in the suit brought under the Employee Retirement Income Security Act (ERISA). The plaintiffs filed a motion for preliminary approval of the settlement agreement that now awaits court approval. It would apply to over 21,000 plan participants.

The plaintiffs sued Mercy Health Corporation and a subsidiary in August 2020, alleging that the defendants breached their duties under ERISA to make prudent investments with retirement plan savings while maintaining commissions and broker fees at reasonable rates. “This relief directly addresses the core issues that plaintiffs raised in the lawsuit and is designed to ensure that the plans’ expenses are reasonable going forward,” the workers said.

The plaintiffs claimed that the plans offered investment opportunities that performed at substandard levels. The workers alleged that Voya persuaded Mercy Health to offer these investments based on their working relationship rather than whether they were prudent. Mercy Health moved to dismiss the suit in October 2020, citing another Seventh Circuit case, April Hughes v. Northwestern University, which involved similar facts.

The settlement states that the nearly $4 million in settlement funds will be divided among the class members, based on the amounts of money in their retirement accounts, using a points system.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.
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