Wake Forest Medical Center Settles ERISA Class Action Suit

July 31, 2023
Hall Benefits Law, LLC

Wake Forest University Baptist Medical Center has agreed to settle a proposed ERISA class action lawsuit pending in a North Carolina federal district court. In Garnick et al. v. Wake Forest University Baptist Medical Center et al., former employees claimed that plan administrators had violated their fiduciary duties under ERISA in administering the $2 billion retirement plan covering about 30,000 participants. The parties informed the judge that they had reached a settlement in principle and agreed to a deadline of July 10, 2023, for the motion for preliminary approval.

In their suit, plan participants claimed that the administrators had failed to use the plan’s size to negotiate reasonable record-keeping fees and monitor and offer healthy investment options. More specifically, the parties alleged that while the plan charged each plan participant between $110 and $141 in annual plan management fees, other plans of similar size charged only about $40 in annual plan management fees per participant. The plan participants also alleged that they suffered significant losses because the committee that oversaw the investment options for the plan failed to seek out lower-cost investment fund options that would have resulted in better returns.

Wake Forest filed a motion to dismiss the suit in December 2021, arguing that the former workers made only general allegations rather than specific claims of misconduct or self-dealing. However, U.S. District Judge William Osteen Jr. disagreed, ruling that the plan participants had alleged enough specificity to maintain their claims that the defendant may have mismanaged their retirement plan.

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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